Latest COT report (Commitments of Traders). Weekly outlook for EUR/USD

There was a reduction in open interest in the euro (704050; -2408) over the past reporting period. Most of the major players were busy liquidating their positions. The Non-Commercial Group got rid of 6834 long and 4026 short contracts. The Non-Commercial net position declined, however, it continues to be outweighed by a bullish mood. The Commercial group reduced long positions by 633, but increased investments in short positions (2470) at the same time. As a result, their net position had an increase, and the dominance of bears remained. In conclusion, the analysis of the total position showed that, despite the general reduction, long contracts for the euro were getting rid of more actively this time (-7760) than short (-1849). All this allowed in the end to increase the overall indicator again and maintain the prevalence of short positions. According to the financial report, the leading Dealers (Dealer Intermediary) maintain their previous trend of a significant reduction in investments in the direction they support. Here, the gains in net positions were previously + 43124 (28.07.20); + 29709 (04.08.20.); +14858 (11.08.20.), according to the latest report (18.08.20.), the increase in the net position was only + 2223.

The main conclusion

Major players in the current situation do not have high hopes for a bullish direction. On the contrary, when they are in doubt and thinking, they are more likely to exclude the priority of long positions than to place bets on it. The general lack of explicit preferences remains.

Technical picture

Technically, a bearish body candlestick was formed last week, which had been absent from the chart for a long time. Thus, the weeks give preference to the development of a bearish correction. After an unsuccessful attempt by players to change the situation to increase, the pair returned to the area of the previous correction, to the zone of attraction and influence of supports 1.1813 - 1.1740 - 1.1695 (weekly worked out target + lower border of the monthly cloud). Perhaps, the players to decline will be busy with reflections in the remaining days of August. By the end of the month, they will need to decide whether they will remain in the monthly cloud, which they entered in July (1.1740 Senkou Span A), or leave it and begin to form a rebound from the resistance encountered.

In the smaller halves, the main advantage is now on the side of the bearish players. The pivot for the decline within the day are the support of the classic Pivot levels (1.1740 - 1.1682 - 1.1611). At the moment, the pair is in the zone of an upward correction, which some technical indicators have set up to support, while the resistance of the central pivot level of the day 1.1811 is being tested. The next correctional reference and key resistance level for H1 is located today at 1.1866 (weekly long term trend). A consolidation above can change the current balance of power on lower time frames.

Ichimoku Kinko Hyo (9.26.52), Pivot Points (Classic), Moving Average (120)