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May 25th 2020 - Institutional ๐Ÿฆ Positions & Supply/Demand for Gold, Oil and the FOREX market

Based on the Commitments of Traders data reported on: May 19th 2020

๐Ÿ“Š In the Markets: We are seeing some downwards pressure on pairs like the #GBPUSD, #AUDUSD and #NZDUSD that is coming into play. With respect to the #GBPUSD we must remember that the monthly area of buying that price has been reacting from first was used to propel price higher into more substantial supply areas. From this area we saw a move lower take place. We see no signs of the #institutions producing any real buying from these lows and instead price keeps attacking the area theyโ€™ve been reversing price to the upside. What this typically leads to is an eventual move lower on the charts BUT I mention this cautiously because the sentiment is currently neutral and only recently have we begun to see

some momentum build to the downside in regards to net positions. Still this may be an early indication of more lows but weโ€™ll sit on the sidelines with respect to this pair.

As for the #AUDUSD, price contacted some supply but we are not seeing the typical accumulation of short positions and the dynamics on the chart shifting to produce momentum to the downside. This may be too early but we will mention that this typically is a sign of weakness for a bearish structure to form on the charts. Then we have the #NZDUSD and it would seem that there is bearish pressure coming into play on the charts and the dynamics would suggest more downside is coming for the short term and this move could be fueled by the weak #AUDUSD as weโ€™ve seen these two correlated very well.

#GOLD is strong and the dynamics on the chart suggest more upside is coming. Some โ€œanalystsโ€ are suggesting that there was a large increase in short positions which could indicate a move lower is coming but when you put things into perspective, this increase in shorts is very weak and not by any means an indication that price is going lower. Applying the Sherlock Analysis Process to the charts we can see that the institutions are creating areas of potential future buying zones. I say potential because when you examine these areas they may use to for buying, what actually took place at these areas was profit taking on long positions. So putting this in perspective, new buying will have to take place to fuel a move higher should price retrace sub 1600โ€™s. Knowing this, the ideal situation would be to have current demand areas become valid and if a retracement takes place, waiting for signs of strong buying to take place before jumping on board alongside them. Otherwise longing will be risky. We are on the watch for this.

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