January 31st 2021 - Institutional 🏦 Positions & Supply/Demand for Gold, Oil and the FOREX market
Based on the Commitments of Traders data reported on: January 26th 2021
📊 In the Markets: We have been slowly gathering up evidence to suggest that we could be seeing the start of retracements on many of the pairs we trade. The #USDCAD for instance is starting to show signs that the banks could start pushing price higher. The data is suggesting this and so far on the daily chart we have seen a momentum shift upwards which also suggests this and this latest data release is showing an increase in long positions. This is coming at a place where price has contacted demand so it is not a stretch to think that this is what is about to take place. When we combine this with what the dollar is showing us we
don’t at this time see evidence to suggest a move higher. The #DOLLAR has a structure on the H4 chart with supply located higher up. We recently contacted it but then price dropped. We need to see this zone removed if there is any chance of a rally towards supply higher in the charts.
Then we look at the #EURUSD and what we can see is that the banks have been increasing their longs with no adjustments to their shorts. Is this strong evidence for a drop in price? No, but we also have H4 demand in play and if this demand is to be taken out then yes we have strong chance of a drop in price to contact demand just lower in the charts. Either way the #EURUSD will make for a good long soon. Just need to see if we get a drop or continuation higher. Will be prepared for either situation.
The #GBPUSD is also in a similar situation as the #EURUSD in that is looks ready for a drop and the evidence to support this has been in a lack of proper upward structure to support price and just recently they increased their short exposure by a drastic amount. This could be in preparation for a drop to come. It’s a bit too soon to speculate but these are things we are watching for this week to see if they start to develop into something more concrete.
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