We have seen certain pivotal levels act as break out points and subsequently become key areas of support. We saw this at the 9500 level and again with 105 as you mentioned. With the transition of Dec'19 into the March 2020 contract, we now shift focus to key levels for March. Before I comment on the COT, I would like to note the 10800 level , IMO , is now a pivotal level. I think if 1.08 fails to hold, we may see a more aggressive attempt to pressure the market back towards 1.05 where I think the commercials that Tango alluded to will step up and lend support. On the upside, I think 1.13 - 1.15 is a major hurdle.
We see the REAL , while relevant from a currency perspective, has taken a backseat in the eyes of some KC market participants. Forward selling, I think, may be influenced by the weak REAL but I think the elevated levels off the contract lows bring about an opportunity for certain players to position themselves.
I agree, the funds , which continue to cover, are less attracted to the movement of the currency and more the algorithmic activity reflective of their position.
As for the weather, I hear mixed things so it's hard to put more weight one way or the other. Perhaps some of our Brazilian friends could add their thoughts.
Just a few thoughts!
Good trading to all.