FX.co ★ berta.hill | EUR/USD

EURUSD. Greetings to everyone. The latest COT report on euro futures for September 8 has been released, and it requires very careful analysis because it combines two powerful factors: a futures contract rollover and real changes in the positioning of major players. Let's start with open interest. It jumped by 77 052 contracts and reached 942 464. This is a colossal increase, but it's important to note right away: most of this growth is technical, related to the rollover from the September contract to the December one. The number of traders decreased to 314, which confirms the technical nature of the move. Some of the data on participant groups is clearly incomplete, and this is also a sign of a transitional period. Now on the structure. Commercial participants (Commercial) sharply increased both long and short positions. Longs grew by 59 242 contracts, shorts by 43 785. But since the shorts were larger in absolute terms, their net position turned short again and amounted to minus 6 730 contracts. This is a bearish signal, but with a rollover caveat. Large speculators (Non-Commercial), on the contrary, reduced both long and short positions. Longs decreased by 4 968 contracts to 198 509, shorts decreased by 12 723 contracts to 241 125. Their net short position shrank from 50 371 to 42 616 contracts. So speculators continue to cover their shorts but still remain net short. In the expanded report the picture is even more interesting. Dealers and intermediaries practically did not change long and short positions but sharply increased spreads by 32 300 contracts. Asset managers increased long positions by 16 189 contracts and shorts by 28 764, and reduced spreads by 14 731. Leveraged funds reduced both long and short positions, but at the same time sharply increased spreads by 37 235 contracts. This is a classic rollover picture: large players are rolling through spreads and arbitrage rather than through pure directional bets. Now let's move to the levels that currently define the whole picture. The options balance is at 1.15754. The upper boundary of the options range is 1.19329, the lower is 1.14476. The balance of the current futures contract is located in the 1.16172-1.16025 area. The long-term trend balance according to COT data is in the 1.15379-1.15257 range. What this means in practice. The price is currently trading around 1.16, that is, inside the balance of the current futures contract 1.16172-1.16025. This is the key zone that will determine the near-term direction. If the bulls can hold above 1.16172, the road to the upper boundary of the options range at 1.19329 will open. If the price falls below 1.16025, the first target will be the options balance at 1.15754, and then the long-term COT balance 1.15379-1.15257. The lower options boundary of 1.14476 remains a distant reference in case of a strong bearish move. Comparing this with the COT data yields the following picture. Speculators are reducing their short positions, which is a bullish signal. Commercials increased short positions, which is a bearish signal. Dealers and leveraged funds are actively working through spreads, which indicates high uncertainty and preparation for a strong move. Open interest has risen, but a significant part of this increase is a technical rollover. Thus, the market is at an equilibrium point where none of the groups has a clear advantage. The key battle is around the 1.16172-1.16025 zone. As long as the price stays above the options balance at 1.15754, the bullish scenario remains viable. If the price settles below that level, pressure on the euro will increase, and the next targets will be the 1.15379-1.15257 levels. The next COT report, when the data have settled after the rollover, will show who actually controls the market. For now, we remain in observation mode and watch carefully for the price reaction at the key levels. Good luck to everyone.