DXY (COT Analysis)Okay, here is the DXY or the Dollar Index. Part 1...
This post is going to be quite long as it is going to serve as the post that introduces something im gonna try and update weekly. the COT Report. Now, i had no idea what the COT report was until i watched and looked at a very popular, here on TrdingView, trader's charts and saw his very useful indicator! I did my own research and thanks to another popular trader, again here on tradingview, who helped tremendously with providing some very useful resources i was able to learn about the COT.
Now Here is going to be a trial, mainly for my own reference, to track which pairs too look out for. So without further wait:
the USD Bias- Undecided
Commercials - current== (16 438) and the previous == (18 407)
Non-Commercials- Current== 14 799 and the previous== 17 297
Open Interest - current == 28 298 and the previous == 31 477
What does this mean? This means the Dollar is stalling right now. The open interest went down which suggests that both sides closed out positions without opening up new ones. the non commerciasl are still selling and the non-commercials are still buying which is giving us the slight rise in PA. However on the COT Index the Gap is closing between the Commercials and Non-Commercials., nd both sides are nearing the Zero Line. the last time this happened the Dollar fell to 86-87. This might be just a profit taking session to give the DXY a slight rest as the 30 year bond rate on the COT index the Commercial failed to take out their previous buying high set in april, so we could see bond rates go lower while the interest gets a bit higher attracting more investors into the American economy!
The Euro Bias- Moderate Buy!
Commercials- Current== (-106 256) previous ==(-102 594) change == (-3 662)
Non-Com- Current== 75 222 previous== 72 562 change ==2 660
Open interest- current== 556 749 previous== 547 206 change== 9 543
What this tells us is that the Commercials are still selling to the Non-Commercials and this is deduced from the increase of the Open Intrest. The euro makes up ike 56% of the DXY and this currency is a moderate buy! now what i want to see is another increase in long orders so the COT index exceedes the current Buy level. Its no Seceret that Germany is the Back Bone of the Euro providing 20% to the Union Budget followed by France and the UK at 15%. Now Germany's main Export are cars and other electronics and Platinum and Palladium are main metals for those as they provide for conduction in the electronic compntes and for emission parts on cars. Both metals took a hit in price and Commercial and Non-Commercials have relieved both sides during COVID-19 making both metals cheaper. now when the economy opens back up i would not be shocked if the main compaines that make these pieces of equipment and cars to buy a surplus to Hedge their physical position causing a slight dip initially in their profit share only to expand in the long run causing the Euro to grow stronger as Germany offers more to the Union Budget.
To Be Continued...
