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Old 11-05-2008, 09:43 AM
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Originally Posted by Jeremy Demunter View Post
Hi everyone,

I've got some COT data on the euro, from 2000 to now. The COT Index using data from 2000 to now is showing lowest reading ever, a bearish extreme. Speculators are extremly short and Commercials are extremly long. So I'm expecting a turn soon on EUR/USD. There's a chance that we could go lower, because the % long speculators (=non commercial) ratio isn't below 10 yet (but it is at a low which hasn't been reached since 2000), nonetheless a rally is close by. Using the 52 weeks index we seem a simular picture.

Greetings,
Jeremy
Certainly valid points. You can see similar charts for other major pairs in Jamie's weekly COT report:

US Dollar Could Top on Overextended Forex Futures Positioning

Across the board it seems that traders have become overextended on US Dollar-long positions, and it seems only a matter of time before they begin to unwind pent-up dollar demand.
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