COT Market Sentiment
This week’s COT report highlights a sharp divide between weak commodity currencies and strong safe-haven assets. The shift provides excellent setups for those applying disciplined swing trading risk management and assessing trades through a forex swing trade risk-reward calculator.
COT Sentiment Recap:
- AUD – WEAK (5/5)
- GBP – MIXED
- CAD – WEAK (3/5)
- EUR – STRONG (5/5)
- JPY – STRONG (3/5)
- CHF – WEAK (5/5)
- USD – WEAK (5/5)
- NZD – WEAK (5/5)
- GOLD – STRONG (5/5)
- SILVER – STRONG (5/5)
Market Analysis
GOLD
Gold has turned sharply bearish as the Fed signals fewer rate cuts and global trade risk eases. The MACD shows strong bearish volume, while RSI confirms selling momentum. Swing traders should consider short setups with an optimal risk to reward ratio and closely monitor forex swing entry and exit points around EMA200.
SILVER
Silver is pulling back after failing to hold its upper range. Indicators show strong bearish momentum, though the broader trend hasn’t fully reversed. Traders should remain neutral until structure confirms. This is a case where swing trading risk management helps avoid premature entries during corrective phases.
DXY
As we anticipated yesterday, the Dollar experienced a significant rally. This powerful move has shifted the overall market momentum and structure to bullish. The MACD and RSI show extreme growth in buying momentum and volume, supporting our call for more buying opportunities in the coming days.
Fundamentally, the Dollar’s strength is supported by easing trade tensions and a more stable economic outlook:
This de-escalation of trade conflicts has lessened analysts’ worries about a potential drag on the U.S. economy, boosting investor confidence and strengthening the dollar as capital flows toward U.S. assets. Many now see the global trade environment as returning to a state of normalcy.
Looking ahead, we may see a short-term retracement later today before a continuation higher, potentially driven by the release of the JOLTS Job Openings data. Alternatively, the price could consolidate this morning before another surge higher this evening. A framework trade agreement was reached between the U.S. and the EU, and talks with China have resumed, keeping the threat of sharply higher tariffs at bay.
GBPUSD
The Pound is under pressure as bearish momentum builds. MACD and RSI confirm the sell-off, making it a potential short opportunity. Traders should use a forex swing trade risk-reward calculator to assess whether the setup meets the optimal risk to reward ratio and consider short-term volatility when sizing trades.
AUDUSD
AUDUSD is testing the EMA200 for support but showing bearish momentum. Despite its broader uptrend, caution is warranted. Swing traders should watch for a clear break before entering. Managing position size and using proper swing trading risk management will be critical here.
NZDUSD
NZDUSD follows a similar pattern to the Aussie, testing support while MACD and RSI lean bearish. The broader trend hints at recovery, but confirmation is needed. Until then, wait for valid forex swing entry and exit points and prepare for both directions.
EURUSD
EURUSD remains bullish, bouncing off EMA200 with strong MACD volume. However, RSI nearing overbought suggests pullback risk. This is a scenario where applying your forex swing trade risk-reward calculator and sticking to a tight stop loss can help with managing losses in forex swing trades.
USDJPY
USDJPY is bullish as the Yen weakens amid improving risk sentiment. MACD and RSI support more upside. Traders should wait for a confirmed break of the pivot zone. Long entries should be timed precisely using a structured forex swing trading approach and favorable entry and exit points.
USDCHF
USDCHF continues to consolidate, with signs pointing toward a bullish breakout. Franc weakness combined with USD strength supports this bias. Traders should stay patient, entering only when structure confirms. Respecting an optimal risk to reward ratio helps reduce exposure in ranging conditions.
USDCAD
USDCAD is gaining traction, with strong buying momentum and bullish RSI/MACD signals. A breakout above 1.37261 will likely confirm a shift in market structure. Entries can be planned with a forex swing trade risk-reward calculator to ensure efficient trade planning and swing trading risk management.
Final Thoughts
This week’s setups are driven by shifting Fed tone, improving risk sentiment, and mixed COT flows. Staying focused on swing trading risk management and using a forex swing trade risk-reward calculator for every position can improve trade outcomes. Always maintain an optimal risk to reward ratio, follow clean forex swing entry and exit points, and stay disciplined when managing losses in forex swing trades. A consistent and structured forex swing trading approach ensures you’re prepared for volatility and trend changes alike. Visit: https://worldquestfx.com