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Positions of large speculators according to the COT report as at 1/10/2021

Total net speculator positions in the USD index rose by 1,400 contracts last week. This change is the result of an increase in long positions by 8,200 contracts and an increase in short positions by 6,800 contracts.

Total net speculator positions in the USD index are the highest in last 98 weeks. The last time bullish positions in the USD were this high was in November 2019, when total net speculator positions reached 27,800 contracts. Speculators' positions in the USD have been rising for 14 of the last 15 weeks.

The increase in total net speculator positions occurred last week in the British pound, the New Zealand dollar and the Canadian dollar.

Declines in total net positions occurred in the euro, the Australian dollar, the Swiss franc, and the Japanese yen.  

Last week saw larger corrections in equity indices. These corrections took place in the context of rising yields on 10-year US Treasuries, which reached their highest levels since February 2020.

Along with this risk-off sentiment, the US dollar strengthened. In particular, there was more weakness in the euro, the British pound, the Swiss franc and the New Zealand dollar.

The positions of speculators in individual currencies

The total net positions of large speculators are shown in Table 1: If the value is positive then the large speculators are net long. If the value is negative, the large speculators are net short.
 

 

1/10/2021

24/9/2021

17/9/2021

10/9/2021

3/9/2021

27/8/2021

USD index

26,500

25,100

24,300

21,500

20,700

20,400

EUR

900

12,100

27,800

26,300

10,500

24,600

GBP

2,000

-200

4,800

-24,500

-14,900

-16,700

AUD

-86,400

-85,600

-83,400

-70,500

-60,100

-56,600

NZD

10,200

8,100

6,200

3,900

-2,100

-400

CAD

-20,200

-27,900

-9,300

-6,000

-2,800

5,900

CHF

-11,600

-9,200

-5,900

200

4,000

4,100

JPY

-64 800

-56,100

-60,300

-62,300

-63,100

-66,700

Table 1: Total net positions of large speculators

 

Notes:

Large speculators are traders who trade large volumes of futures contracts, which, if the set limits are met, must be reported to the Commodity Futures Trading Commission. Typically, this includes traders such as funds or large banks. These traders mostly focus on trading long-term trends and their goal is to make money on speculation with the instrument.

The total net positions of large speculators are the difference between the number of long contracts and the number of short contracts of large speculators. Positive value shows that large speculators are net long. Negative value shows that large speculators are net short. The data is published every Friday and is delayed because it shows the status on Tuesday of the week.

The total net positions of large speculators show the sentiment this group has in the market. A positive value of the total net positions of speculators indicates bullish sentiment, a negative value of total net positions indicates bearish sentiment.

When interpreting charts and values, it is important to follow the overall trend of total net positions. The turning points are also very important, i.e. the moments when the total net positions go from a positive value to a negative one and vice versa. Important are also extreme values of total net positions as they often serve as signals of a trend reversal.

Sentiment according to the reported positions of large players in futures markets is not immediately reflected in the movement of currency pairs. Therefore, information on sentiment is more likely to be used by traders who take longer trades and are willing to hold their positions for several weeks or even months.
 

Detailed analysis of selected currencies

Explanations:
 

Purple line and histogram in the chart window: this is information on the total net position of large speculators. This information shows the strength and sentiment of an ongoing trend.

Green line in the indicator window: these are the bullish positions of large speculators.

Red line in the indicator window: indicates the bearish positions of large speculators.

If there is a green line above the red line in the indicator window, then it means that the overall net positions are positive, i.e. that bullish sentiment prevails. If, on the other hand, the green line is below the red line, then bearish sentiment prevails and the overall net positions of the big speculators are negative.

Information on the positions of so-called hedgers is not shown in the chart, due to the fact that their main goal is not speculation, but hedging. Therefore, this group usually takes the opposite positions than the large speculators. For this reason, the positions of hedgers are inversely correlated with the movement of the price of the underlying asset. However, this inverse correlation shows the ongoing trend less clearly than the position of large speculators.

Charts are made with the use of www.tradingview.com.
 

Euro

Date

Weekly change in open interest

Weekly change in total net positions of speculators

Weekly change in total long positions of speculators

Weekly change in total short positions of speculators

Sentiment

1/10/2021 4,500 -11,200 5,700 16,900 Weakening bullish
24/9/2021 10,400 -15,700 2,900 18,600 Weakening bullish
17/9/2021 -43,600 1,500 -3,400 -4,900 Bullish
 
COT-6-8-obr-1.png

Figure 1: The euro and COT positions of large speculators on a weekly chart

Total net speculator positions fell by 11,200 contracts last week. This change is due to the growth of long positions by 5,700 contracts and the growth of short positions by 19,600 contracts.

The price of the euro continued to weaken last week and broke through support at 1.16.

Long-term resistance: 1.1870 - 1.1900

Long-term support: 1.1350 - 1.1500

 

The British Pound

Date

Weekly change in open interest

Weekly change in total net positions of speculators

Weekly change in total long positions of speculators

Weekly change in total short positions of speculators

Sentiment

1/10/2021 11,900 2,200 6,000 3,800 Bullish
24/9/2021 17,300 -5,000 7,700 12,800 Bearish
17/9/2021 -58,800 29,300 14,800 -14,500 Bullish

 

COT-16-7-obr-2.png

Figure 2: The GBP and COT positions of large speculators on a weekly chart


Last week, the total net positions of speculators grew by 2,200 contracts. The change in total net positions over the past week is the result of long positions growing by 6,000 contracts and short positions growing by 3,800 contracts.

The pound weakened against the US dollar last week, first breaking through support at 1.36 and continuing to fall by another 200 pips. New support is in the band around 1.34.

Long-term resistance: 1.3900-1.3980

Long-term support: 1.3350-1.3400

 

 

The australian dollar

Date

Weekly change in open interest

Weekly change in total net positions of speculators

Weekly change in total long positions of speculators

Weekly change in total short positions of speculators

Sentiment

1/10/2021 -4,600 -800 -6,300 -5,500 Bearish
24/9/2021 20,800 -2,200 11,600 13,800 Bearish
17/9/2021 -8,800 -12,900 -19,400 -6,500 Bearish
 
COT-16-7-obr-3.png

Figure 3: The AUD and COT positions of large speculators on a weekly chart
 

The increase in bearish sentiment on the Australian dollar continued. Last week, speculators' total net positions fell by 800 contracts. This change is due to a decrease in long positions by 6,300 and a decrease in short positions by 5,500 contracts.

The Australian dollar initially weakened last week but eventually closed the week with a slight gain.

Long-term resistance: 0.7450-0.7500

Long-term support: 0.7100-0.7130

 

The New Zealand dollar

 

Date

Weekly change in open interest

Weekly change in total net positions of speculators

Weekly change in total long positions of speculators

Weekly change in total short positions of speculators

Sentiment

1/10/2021 -3,000 2,100 -1,400 -3,500 Bullish
24/9/2021 1,000 1,900 2,100 200 Bullish
17/9/2021 -22,400 2,300 -2,500 -4,800 Bullish

COT-16-7-obr-4.png

Figure 4: The NZD and the position of large speculators on a weekly chart


Last week, total net positions rose by 2,100 contracts. The change in total net positions is the result of a decrease in long positions by 1,400 contracts and a decrease in short positions by 3,500 contracts.

The New Zealand dollar weakened significantly last week. The RBNZ will decide on rates this week. The central bank is expected to raise rates slightly. This should be positive news for New Zealand dollar bulls.

Resistance: 0.7130-0.7160

Long term support: 0.6760-0.6800

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