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Positions of large speculators according to the COT report as at 20/8/2021


Total net speculator positions in the USD index fell by 100 contracts last week. This change is the result of a 500-contract decrease in long positions and a 400-contract decrease in short positions.

The increase in speculators' total net positions occurred in the euro and the New Zealand dollar last week.

The decrease in total net positions occurred in the Australian dollar, the Canadian dollar, the Swiss franc, the British pound and the Japanese yen.

Last week, the Reserve Bank of New Zealand surprisingly left the interest rate at 0.25%. The NZD weakened as the result of this decision.

Last week's weakening of the NZD but also of other currencies was mainly due to the fact that the published US monetary policy report showed that the US Fed might taper the volume of bond purchases faster than generally expected.

This week on Friday, Fed governor Powell is going to speak at the Jackson Hole Economic Symposium. His speech might bring more clarity at the Fed's future intentions regarding tapering bond purchases. The speech could be accompanied by high volatility in the US dollar pairs.
 

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.

 

20/8/2021

13/8/2021

6/8/2021

30/7/2021

23/7/2021

16/7/2021

USD index

19,200

19 300

18,900

16,500

12,200

11,300

EUR

57,600

33 900

38,000

38,100

45,800

59,700

GBP

4,700

7 100

-100

-5,700

-3,500

8,000

AUD

-50,400

-49 300

-41,300

-39,300

-35,700

-28,800

NZD

-200

-1 000

-300

1,400

3,000

3,200

CAD

2,700

6 500

7,500

5,400

12,900

26,400

CHF

5,500

9 700

7,500

8,500

8,000

7,100

JPY

-63,200

-60 700

-55,200

-59,900

-55,700

-56,300

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

20/8/2021 -7,300 23,700 20,700 -3,000 Bullish
13/8/2021 27,600 -4,100 13,800 17,900 Weakening bullish
6/8/2021 -3,500 -100 -3,200 -3,100 Weakening bullish
 
COT-16-7-obr-1-1.png
Figure 1: The euro and COT positions of large speculators on a weekly chart


Total net speculator positions rose by 23,700 contracts last week. This change is due to an increase in long positions of 20,700 contracts and a decrease in short positions of 3,000 contracts.

The price of the euro weakened last week and broke through the support line. The main reason for the weakening was Wednesday's Fed monetary policy report.

Long-term resistance: 1.1870 - 1.1900

Long-term support: 1.1580 - 1.1620
 

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

20/8/2021 -500 -2,400 -2,800 -400

Weakening bullish

13/8/2021 2,000 7,200 1,600 -5,600 Bullish
6/8/2021 -4,500 4,600 1,900 -3,700 Bearish

 

COT-16-7-obr-2-1.png
Figure 2: The GBP and COT positions of large speculators on a weekly chart


Last week, the total net positions of speculators fell by 2,400 contracts. The change in total net positions over the past week is the result of a decrease in long positions of 2,800 contracts and a decrease in short positions of 400 contracts.

The pound weakened strongly against the US dollar last week, mainly due to US monetary policy.

Long-term resistance: 1.3900-1.3980

Long-term support: 1.3350-1.3500
 

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

20/8/2021 15,200 -1,100 6,800 7,900 Bearish
13/8/2021 1,900 -8,000 -400 7,600 Bearish
6/8/2021 2,000 -2,000 300 2,300 Bearish
 
COT-16-7-obr-3-1.png
Figure 3: The AUD and COT positions of large speculators on a weekly chart


The increase in bearish sentiment in the Australian dollar continued last week with speculators' overall net positions falling by 1,100 contracts. This change is due to an increase in long positions of 6,800 and an increase in short positions of 7,900 contracts.

The Australian dollar continues to fall due to new restrictive measures to prevent the spread of the Delta variant of the coronavirus. There are a total of 44,900 cases of COVID-19 in that country, which appears negligible compared to, for example, the Czech Republic, which had a total of 1,680,000 cases. However, the Australians take the threat very seriously and have therefore introduced strict measures to prevent further COVID-19 spread.

Long-term resistance: 0.7360-0.7400

Další dlouhodobý support: 0.6980-0.7020
 

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

20/8/2021 -2,500 800 -600 -1,400

Weakening bearish

13/8/2021 3,900 -700 300 1000 Bearish
6/8/2021 -1,200 -1,700 -2,500 -800 Bearish

COT-16-7-obr-4-1.png
Figure 4: The NZD and the position of large speculators on a weekly chart


Last week, total net positions rose by 800 contracts, the result of a 600-contract drop in long positions and a 1,400-contract drop in short positions.

The Central Bank of New Zealand left the interest rate unchanged last week. The NZD weakened in the aftermath.

Resistance: 0.7030-0.7080

Long term support: 0.6760-0.6800

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