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In our School of Pipsology lesson on Market Sentiment, we discussed how the Commitments of Traders report from the CFTC can be used as a gauge of long-term positioning. When I pulled up the latest one, I noticed that there were some notable shifts in sentiment.

Commitment of Traders Summary (as of May 13, 2014)
Commitment of Traders Summary (as of May 13, 2014)

In particular, the report for last week shows that traders are still net short on the Japanese yen, euro, and Canadian dollar. Non-commercial traders are still net long on the British pound, Swiss franc, Australian dollar, and New Zealand dollar.

However, the difference between the other week’s net positions and that of the previous week shows that there’s a considerable decrease in EUR net shorts. This suggests that traders rushed to exit their long euro positions after Draghi’s speech and the Bundesbank announcement a few days back.

Anything else you can infer from the latest COT report? Don’t hesitate to share your thoughts in our comment box below! If you’re having trouble understanding these figures, make sure you review our lesson on the COT Trading Strategy.