67.90 % of retail investors lose their capital when trading CFDs with this provider.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67.90 % of retail investors lose their capital when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Positions of large speculators according to the COT report as at 20/11/2020

Speculators continue to keep total net positions in the USD index in bearish sentiment albeit they increased their positions by 100 contracts last week.

The positions of large speculators continue to decline in the euro, where it fell for the 8th week in a row. The decline in total net positions also continues in the British pound, where speculators cut their positions for the 4th week in a row. The price of the euro and the pound sterling have not been influenced negatively yet. In this context, we mention that a trade agreement between the EU and the UK, which should resolve the form of Brexit, has not been finalized yet. However, the EU negotiators announced a progress in negotiations last week. This optimism keeps the pound in an uptrend.

The decline in total net positions occurred in the Swiss franc and the Japanese yen.

The growth of bullish total net positions in the New Zealand dollar continued for the 7th week. The total net positions were increased also in the Australian dollar.
 

 
The overall net positions of large speculators are shown in Table 1:
 
20.11.2020
 
13.11.2020 6.11.2020
30.10.2020
 

23.10.2020
 

16.10.2020
 
USD index -1 100 -1 100
700
 
 -1 300  -1 700 450
EUR 134 000 135 300 140 300 155 600 166 000 168 600
GBP -19 700 -17 700 -11 200 -6 700 -2 000 -9 800
AUD -8 700 -1 300 8 900 6 800 3 900 10 800
NZD 8 900 7 700 7 100 7 000 6 600 6 500
CAD -20 400 -21 300 -20 700 - 18 000 -19 100 -13 600
CHF 14 900 15 900 14 900 15 500 14 400 12 200
JPY 29 700 41 900 28 100 17 900 14 200 20 000


Notes:

Large speculators are traders who trade large volumes of futures contracts, which, if the required 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 of long-term trends.

Total net positions are the difference between the number of bullish long contracts and the number of bearish short contracts. The data is published every Friday and is delayed because it shows the status on Tuesday of the week.

The sentiment of large speculators will allow you to see what position this group occupies in the market. It is important to monitor the overall trend of total net positions, but also separately the trend of bearish short positions and the trend of bullish long positions. Extreme values ​​of total net positions are also important as they often serve as signals of a trend reversal.

It is also important to monitor the turning points, when the total net positions change from bullish sentiment to bearish and vice versa. These inflection points are indicated in the graphs in section 3.

Figure 1: The strength of currencies according to speculators, source: www.countingpips.com


The chart compares the current value of the total net positions of large speculators with the value 3 years ago. A score of 0% means that speculators are at their lowest levels in 3 years. A score of 100% means that speculators are at the highest values ​​in the last 3 years. A value of 80% or more means that speculators are extremely bullish, and a value of 20% or less means that speculators are extremely bearish.
 

Detailed analysis of selected currencies

Explanations:
 

  • Purple line and histogram in the chart window: this is information on the overall net position of large speculators.

  • 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.

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

Euro

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

The total net positions of speculators in the euro have been in the bullish territory since March 16, 2020. After the total net positions reached an extremely high value of 211,800 contracts on August 31, 2020, speculators began to reduce their positions. At extreme levels, there is a possibility of reversing the trend in the price of the instrument. However, we have not seen a significant decline in the euro yet. Since August, the euro has been moving in a side trend defined by resistance and support levels.

Over the last 8 weeks, the total net positions have been declining and are currently at their lowest levels in the last 17 weeks. Last week, positions fell by 1,300 contracts.

The price of the euro is currently approaching the first level of resistance in the range of 1.1950 - 1.2000, where a reaction might occur.

Long-term resistance: 1.1950 - 1.2000

Long-term support: 1.1600 - 1.1650
 

The British Pound

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

The total net positions of large speculators in the pound are currently in the bearish zone. The bearish sentiment is probably the result of uncertainty about the further development of the Brexit agreement with the EU. Last week, the negotiators said that there was a significant progress in negotiations and that the trade deal was possible. That is why the pound sterling continues to rise. It reached the level of resistance, at which the price reacted before and bounced downwards.

Note: we have plotted inflection points in the chart and it can be seen that in some cases the price development did not react according to sentiment. For example, in segment D, where we can notice that although the total net positions were in bullish territory, i.e. that long contracts prevailed, but the price fell down. In this case, it happened that the total net positions at that time were in extreme value, for which the trend may reverse. In addition, the price reached previous resistance.

Long-term resistance: 1.33-1.35. But here the price has been tested 3 times.

Long-term support: 1.2650-1.2750
 

The Australian Dollar

Figure 4: The AUD and COT positions of large speculators on a weekly chart

Total net positions in the Australian dollar have been moving in negative territory for the third week. Last week total net positions rose by 2,600 contracts.

The Australian dollar is moving in an uptrend and approaching the resistance level where a reaction might occur.

Long-term resistance: 0.7350-0.7400.

Long-term support: 0.7000-0.7020
 

The New Zealand Dollar

Figure 5: The NZD and the position of large speculators on a weekly chart

In the New Zealand dollar, total net positions are still in bullish sentiment, which has been going on since August 17, 2020. Last week, total net positions rose by 1,200 contracts.

The price continue to grow and it is moving in a rising wedge on a weekly chart. The price is currently at the resistance level.

Resistance: 0.6920-0.6970

The nearest support: 0.6780-0.6800

 

Trade the EURUSD, GBPUSD, and other currencies today!

Your capital is at risk.

67.90 % of retail investors lose their capital when trading CFDs with this provider.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67.90 % of retail investors lose their capital when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.