Positions of large speculators according to the COT report as at 3/9/2021

Total net speculator positions in the USD index rose by 300 contracts last week. This change is the result of a decrease in long positions by 700 contracts and a decrease in short positions by 1,000 contracts.

The increase in total net speculator positions occurred in the British pound last week.

The decrease in total net positions occurred in the euro, the Australian dollar, the New Zealand dollar, the Swiss franc, the Canadian dollar and the Japanese yen.

Last week Friday saw the presentation of the US labour market data. The number of new jobs created (NFP report) was significantly lower than expected. The US dollar weakened strongly in response. The argument for the dollar weakening may be that weaker labor market data could lead to a delay in the government’s bond tapering.

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.

	3/9/2021	27/8/2021	20/8/2021	13/8/2021	6/8/2021	30/7/2021
USD index	20,700	20,400	19,200	19 300	18,900	16,500
EUR	10,500	24,600	57,600	33 900	38,000	38,100
GBP	-14,900	-16,700	4,700	7 100	-100	-5,700
AUD	-60,100	-56,600	-50,400	-49 300	-41,300	-39,300
NZD	-2,100	-400	-200	-1 000	-300	1,400
CAD	-2,800	5,900	2,700	6 500	7,500	5,400
CHF	4,000	4,100	5,500	9 700	7,500	8,500
JPY	-63,100	-66,700	-63,200	-60,700	-55,200	-59,900

_{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
3/9/2021	6,600	-14,100	-3,600	10,600	Weakening bullish
27/8/2021	3,800	-33,000	-39,400	-6,400	Weakening bullish
20/8/2021	-7,300	23,700	20,700	-3,000	Bullish

 

Total net speculator positions fell by 14,100 contracts last week. This change is due to a decrease in long positions by 3,600 contracts and an increase in short positions by 10,600 contracts.

The price of the euro continued to appreciate last week. This was due to weaker data from the US labor market. However, the price is now at the resistance level and a price reaction could happen here. On Thursday the ECB will decide on interest rates, which are very likely to remain unchanged. This meeting could determine the short-term price action in the EURUSD.

Long-term resistance: 1.1870 - 1.1900

Long-term support: 1.1580 - 1.1620
 

We can take the level 1.17 as a support too as this is the level where the price bounced upwards last week.

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
3/9/2021	-2,400	1,800	-2,900	-4,800	Bearish
27/8/2021	18,000	-21,400	-2,400	19,000	Bearish
20/8/2021	-500	-2,400	-2,800	-400	Weakening bullish

 

Last week, the total net positions of speculators rose by 1,800 contracts. The change in total net positions during the past week is the result of a decrease in long positions by 2,900 contracts and a decrease in short positions by 4,800 contracts.

The pound continued to strengthen against the US dollar last week and is approaching the resistance levels.

Long-term resistance: 1.3900-1.3980

Long-term support: 1.3570-1.3620
 

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
3/9/2021	-15,600	-3,500	-13,600	-10,100	Bearish
27.8.2021	10,700	-6,200	3,200	3,000	Bearish
20/8/2021	15,200	-1,100	6,800	7,900	Bearish

 

The increase in bearish sentiment in the Australian dollar continued last week with speculators' total net positions falling by 3,500 contracts. This change is due to a decrease in long positions by 13,600 and a decrease in short positions by 10,100 contracts.

The lockdown in Australia continues to have a negative effect on the Australian dollar. Last week, however, the Australian dollar strengthened under the influence of risk-on sentiment, which is underpinned by the rise in US equity indices. The Australian dollar broke through the first resistance level and the next resistance level is around 0.7560-0.7600.

Long-term resistance: 0.7560-0.7600

Další dlouhodobý 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
3/9/2021	1,900	-1,700	500	2,200	Bearish
27/8/2021	2,200	-200	500	700	Bearish
20/8/2021	-2,500	800	-600	-1,400	Weakening bearish

Last week, total net positions fell by 200 contracts, the result of a 500-contract increase in long positions and a 700-contract increase in short positions.

The New Zealand dollar broke the resistance level and strengthened significantly last week. The price halted at another resistance 0.7130.

Resistance: 0.7130-0.7160

Long term support: 0.6760-0.6800