Blue Line = BRLUSD
26 Nov was a holiday

The chart shows that we reached the 124.00+ area 3 out of 4 times during the COT period and 2 out of 2 times after the COT period, including today. The range was 8.80c with a net change of a negative 3.60c reminding us that the market is volatile and that there is plenty of selling in the form of commercial and others’ delta selling, origin and swap dealer. We saw this last group increasing their long position in recent past reports. The buyers in the report were mostly funds.

The activity of managed money is unexplainable as we look at the numbers. The number of trader reversals seem to contradict the position activity. Nonetheless, we can say that, in spite of the almost 9c drop from the highs, funds were significant buyers. We can safely assume that they remained buyers after the COT including today.

Strictly from a COT and market behavior point of view, today was noteworthy. Selling is obviously present as is fund buying. The selling was the usual substantial selling that we see on strength, and as we see on the COT. The buying is of course funds that program and time their activity, generally. The selling is more instantaneous and not consistent so when it ceases the market recovers as it did today. After settlement, prices continued higher indicating short covering by day-traders.

Looking forward, the market remains steady but with a great deal of resistance. Breaking 125.00 will be a challenge for this market, but if it does break it, we can see higher prices. We do need a bigger cast of buyers other than the funds.