Blue Line = BRLUSD
The market was mostly slow moving and remained near the striking prices of 120.00 and 125.00 for the most part. The exception was the “Reddit” rally to 127.30. Although as reported there was no Coffee ETF buying, it appears that traders expected a reaction in sympathy to the silver market. But prices returned to their narrow range. Volume began in the mid 30k and increased as the period progressed, registering over 70k as prices moved to the highs. There was another 70k+ move on the Thursday following the COT report. Most of the activity was inthe form of rolling out of H into forward months. There was forward buying of spreads as well by either trade or spec.
The COT again shows minimal changes in positions as a result of two way moves. There seems to be origin selling forwards on strength. Non reportable traders increased their long positions but managed money was flat. Not in Robusta however as the sector increased again their short position.
The key move imo was on the 4th in which the market tested the lows near 120.00 and bounced from that point to end the day on a firm note. The OI on that day increased by over 4K as the H OI dropped adding to the liquidation of 5k lots more than what the COT report shows.
The timbre of the market is friendly. It feels as if 120.00 is a solid base, maybe the new 100.00. However, the upcoming option explanation is restricting the range. Expiration is taking place on Wednesday the 10th. That will decrease the H OI significantly to the point that K will be the lead month. The roll will continue and possibly providing erratic moves. The COT report is neutral but market behavior shows a steady sentiment.
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