FX.co ★ berta.hill | EUR/USD

EURUSD. What I see in the COT reports and how it fits with the options picture. I checked the latest COT reports. What can I say based on them? At the moment, even though the price has broken the balance of the long-term trend, which is at 1.15727, I am not confident that the decline will continue. Yes, the breakout happened. Yes, the price dropped below the important level. But this is not the first time that the bears have tried to push the market below this balance. The first attempt was very recent, just a few weeks ago. And back then, during that decline, groups of participants even tried to exchange positions - that is, to change priorities. But it didn't work out for them. The reversal did not happen. Currently, at the moment, there is no exchange of positions at all. Groups are not changing their structure. Perhaps changes will occur after the futures contract rollover is completed. But for now - calm. If you carefully look at the latest COT report, an interesting picture emerges. The Commercial group, representing large hedgers and institutional players, actively took both Long and Short positions. They did not choose one side, they traded on both. This usually indicates preparation for continued range trading, rather than a sustainable trend. The Non-Commercial group, speculators, on the other hand, were closing their short positions and betting on Long positions. They were exiting sales and increasing purchases. This is an important signal. Now let's put all the data together. We take options, futures, COT - and try to see the whole picture. If we combine all this, we can assume that waiting for a deep drop in the current situation does not make sense. The bears broke the balance, but the position structure does not confirm a sustainable decline. Most likely, we will return to the highs of that narrow range in which we have been trading for several weeks. And maybe even higher. It is worth noting that the best option now is to simply wait for the completion of the futures contract rollover. See where exactly the balance of the September futures contract will form, at what prices it will pass. And based on this new balance, dance, make plans. The fact of how the rollover will go is very important. If during the rollover process the groups can finally exchange positions, that is, reverse their priorities, then most likely the downward movement for the next quarter will already have a stable, trending character. And if there is no exchange, then we will again remain in the range. In any case, at the moment, in terms of options, the upper limit of the overall range has already been set around 1.17416. It is not worth ruling out this scenario. And this level is very interesting in what sense. It fits right into the breakout from that narrow range we were in. A sharp jump up, stop loss collection, return to the range. By the way, at one point, an important level at the price of 1.17218 was broken, but it was never retested. And option traders continue to insist that returning to this level is worth it. That's their intention. Now about the lower end of the options range. At the moment, it is fixed at a price of 1.14200. But most likely, this is not the final low for the new contract. There is a possibility that it will be shifted lower as the rollover develops. However, it is not worth rushing to conclusions. Everything can change. I will make all adjustments solely based on the actual changes in options data. As soon as I see new volumes at new strikes - I will immediately adjust the levels. Good luck.