Home » COT Report » Open Interest British Pound 21 February 2010

Open Interest British Pound 21 February 2010

UK Pound Open Interest volumes

British Pound - Open Interest Volumes Weekly 2008 to 2010

Open interest in the British Pound increased dramatically last week moving strongly from 95,700 contracts of 2 weeks ago to 119k of 16th February, and as clearly evidenced on the weekly COT chart continues to increase from the low of mid December at 72k.  With open interest volume now increasing and a consequent fall in the pound against the dollar this suggests strongly bearish sentiment in the market.  In simple terms the rise in open interest indicates new trading positions being created, with the fresh money probably creating additional short positions which are adding further to the bearish pressure.  The current open interest picture confirms the current technical perspective both on the daily and weekly charts in the spot market.   It is also interesting to note that in mid 2008 we saw an exponential increase in open interest (in excess of 180k contracts) while prices were range bound at the USD1.95 to USD2.0 price region.   This type of activity in the futures market is often an excellent signal of an imminent and significant move, and whilst the market direction cannot always be forecast with any degree of certainty, it can provide us with an excellent early warning sign that the market is about to break out.

GBP/USD Weekly Chart Spot Market rates

Weekly Spot Market FX Rates GBP/USD -2008 to 2010

What is one of the best retail forex trading platforms?  In my view it is Metatrader 4.  Advanced, powerful & intuitive it now comes with ECN execution, so you can happily scalp away without broker or dealer intervention.  Just download your free demo copy of MT4 by following this link – download metatrader free –  and get started today.  Don’t forget to follow my daily posts for updates and analysis of the forex markets to help you with your forex trading – so good luck and good trading.

Comments are closed.