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COT Data Shows Potential Euro Buying Pressure – October 19th 2015 FX Analysis

October 19
02:10 2015

EUR/USD Continues To Remain In Large Range

The latest COT (Commitment Of Traders) data showed an interesting move in the Asset class in regards to the Euro. The Asset class is the longest term perspective that is represented in the COT data and therefore any shift can last for years. Looking at it from the other perspective we shouldn’t get too excited about a weeks worth of movement. Last week the Euro showed heavy buying pressure with the Euro moving close to a net flat position after having been negative for the last 2.5 years. How should we apply that to our short term day trading strategy

On a short term basis the Euro a very clear floor set around the 1.1340 area and therefore as long as that level holds then we could see further upside. Should that short term support level break then any longer term bullish momentum in the price may be further away. In regards to an upper level that is holding the price back we have the 1.1390 area. Should this level break and hold then we could see further upside. To start the week I would like to keep my market cycle bias open and simply take any valid stop run reversal trade setup from any of the listed manipulation points.

EUR/USD Chart - October 19th 2015

Pound Near Range Highs

The COT report also showed heavy buying pressure on the Pound in the Asset class section. The shift in the Pound was even more aggressive than that of the Euro which does support buying the GBP/USD this week. As I always say when I mention COT data, you cannot just buy when you see buying pressure or sell when you see selling pressure as it does not have a direct correlation. I think this is especially true with the GBP/USD. As of right now the 1.5500 resistance level is a major line in the sand that I will be looking at. Should we see a daily chart close above this level then the buying could happen quicker than expected. If however that level continues to hold then the buying pressure is capped.

Looking at the short term price action on the GBP/USD I really like the potential manipulation points that we have to work with to start the week. The upper level is a major point and the lower levels are significant as they created sizeable reactions in the price. In regards to selection of good levels, one of the things I talk about in the our forex day trading course is what other levels are around the point your looking at. Another words ask yourself this question…”if I was short/long where would my stop be located?” When you can identify a level and there is no other level that is even worth considering then that is manipulation point that more than likely contains a mass of liquidity. 

Today my directional bias remains open and I will be taking any valid stop run day trade setup that occurs from the listed manipulation points on the GBP/USD chart below.

GBP/USD Chart - October 19th 2015

Forex News For October 19th 2015

This is a big week that has a great deal of forex news that will be capable of major spikes and short term directional changes. To start the week however, Monday is clear in regards to major economic data that I will be concerned with.


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