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The COT Index is the percentile of the difference between net speculative positioning and net commercial positioning measured over the last 52 weeks. A reading close to 0 suggests that a bottom is forming and a reading close to 100 suggests that a top is forming. The readings are for the actual currency, not the currency pair. For example, a reading of 100 on the Canadian Dollar suggests that the Canadian Dollar is close to a top (USDCAD close to a bottom).
Readings of 95 and higher as well as 5 and lower are in boldfaced red type to indicate potential market extremes. The last 4 weeks of the COT Index are shown because it is just as important to know where the index is coming from. For example, an increasing index is bullish until the index is extreme (near 100), at which time the risk of a reversal or pause in the trend increases.
US Dollar Index: The 52 week COT index is at 94 and the 13 week index is at 75. The US Dollar has turned from an optimistic extreme and should be in for a period of sustained weakness.
Implications: Bearish
EUR: The 52 and 13 week indexes are at 27 and 83 after turning from a bearish extreme in May. The turn from a bearish extreme keeps us looking higher. Although the 13 week index is near a bullish extreme, this shorter term index usually does remain extreme for at least 2 to 3 weeks.
Implications: Bullish
GBP: The 52 and 13 week indexes are at 27 and 75. The analysis for the GBP is the same as that for the Euro; expect strength.
Implications: Bullish
CHF: The 52 and 13 week readings are at 33 and 58. The indexes have been extremely volatile lately. A bearish extreme reading from the 13 week index in May turned us CHF bullish (USDCHF bearish) but the pair registered a bullish extreme last week even though the currency has moved very little recently. With such mixed signals, there is no confident bias from COT.
Implications: Neutral
JPY: The 52 and 13 week COT indexes are at 33 and 25. The 13 week index has remained slightly above 0 (bearish extreme) for much of the last 2 months so we are leaning towards the bull side (USDJPY bearish).
Implications: Bullish
CAD: The 25 and 50 week COT indexes are at 2 and 8 after being at 0 and 0 last week. Sentiment has turned from a sentiment extreme, indicating that a turn towards CAD strength is probable.
Implications: Bullish
AUD: The 52 and 13 week COT indexes are at 67 and 17. Expect strength to continue until the indexes are near 100.
Implications: Bullish
NZD: The 52 and 13 week COT indexes have remained close to 0 since March. Sentiment towards the NZD has turned from a bearish extreme. The NZD should rally.
Implications: Bullish
