Blue Line = BRLUSD

The market was quiet during this holiday season with few interesting activities evident in the COT report. Within the 5.50 range, and a net change of positive 1.20c, funds net bought in KC while commercials sold. In RC, commercials also sold to swap dealers in the form of Jan EFP, not a very exciting highlight. But the KC buying by funds and large traders is more interesting because it is new buying. Also notable was the new selling in these sectors.

The market itself was volatile in its low volume with congestion in the 125.00 area where it closed. Prices found support as they dropped and resistance as they rose.

Today the market remained weak in spite of the strong opening and the initially strong Real. We have index adjustments to take place in the next few days and option expiration on the 8th of this month for the Feb options. The COT itself is neutral but together with the price action it is not very reassuring for the upside, imo. Nevertheless, a sharp drop may be an opportunity.