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Positions of large speculators according to the COT report as at 30/7/2021

Total net speculator positions in the USD index rose by 4,300 contracts last week. This change is the result of a 3,000 contract increase in long positions and a 1,300 contract decrease in short positions.

The increase in total net speculator positions occurred on the Swiss franc last week.

Decreases in total net positions occurred in the euro, the Australian dollar, the New Zealand dollar, the Canadian dollar, the British pound and the Japanese yen.

Last week's US Fed meeting did not suggest faster interest rate hikes. As a result, the US dollar weakened and equity indices strengthened. This week, the central banks of Australia and the UK will decide on interest rates.

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.

 

 

30/7/2021

23/7/2021

16/7/2021

9/7/2021

2/7/2021

25/6/2021

USD index

16,500

12,200

11,300

7,600

-400

-500

EUR

38,100

45,800

59,700

77,200

87,200

89,100

GBP

-5,700

-3,500

8,000

21,900

17,700

17,900

AUD

-39,300

-35,700

-28,800

-24,900

-17,800

-17,600

NZD

1,400

3,000

3,200

1,800

3,100

3,300

CAD

5,400

12,900

26,400

41,200

45,800

43,200

CHF

8,500

8,000

7,100

10,200

11,100

13,600

JPY

-59,900

-55,700

-56,300

-69,100

-69,900

-53,900

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

30/7/2021 -5,100 -7,700 -6,400 1,300 Weakening bullish
23/7/2021 -5,900 -13,900 -4,200 9,700 Weakening bullish
16/7/2021 -10,400 -17,500 -200 17,300 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 fell by 7,700 contracts last week. This change is due to a decrease in long positions by 6,400 contracts and an increase in short positions by 1,300 contracts.

The price of the euro strengthened strongly last week following the US Fed meeting, which did not indicate faster interest rate hikes in the US.

Long-term resistance: 1.2240 - 1.2350

Long-term support: 1.1700 - 1.1750
 

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

30/7/2021 -3,400 -2,200 -3,000 -800 Bearish
23/7/2021 16,400 -11,500 -500 11,000 Bearish
16/7/2021 -6,400 -13,900 -12,500 1,400 Weakening bullish

 

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


The total net positions of speculators fell by 2,200 contracts and are moving in a bearish negative range. This change is the result of a 3,000 drop in long positions and an 800 contract drop in short positions.

The pound strengthened against the US dollar last week based on the Fed's decision. This week, the UK central bank will be making a rate decision on Thursday which could have a major impact on the Pound's near future.

 

Long-term resistance: 1.42-1.4350

 

Long-term support: 1.3670-1.3700
 

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

30/7/2021 4,300 -3,600 400 4,000 Bearish
23/7/2021 7,600 -6,900 400 7,300 Bearish
16/7/2021 8,600 -3,900 3,400 7,300 Bearish
 
COT-16-7-obr-3-1.png
Figure 3: The AUD and COT positions of large speculators on a weekly chart


Last week, speculators' total net positions fell by 3,600 contracts. This change is due to an increase in long positions by 400 and an increase in short positions by 4,000 contracts.

The Australian dollar continued to weaken last week. Further developments will be influenced by this week's Reserve Bank of Australia decision on Tuesday.

Long-term resistance: 0.7550-0.7600

 

Next long-term support:0.7000-0.7050  

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

30/7/2021 400 -1,600 -1,200 400 Weakening bullish
23/7/2021 1,100 -200 0 -200 Weakening bullish
16/7/2021 700 1,400 1,200 -200 Bullish

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 fell by 1,600 contracts, which is the result of a 1,200 drop in long positions and a 400-contract increase in short positions.

The NZD is trading near the 0.6920 support level, which has been tested several times and broken last week.

Resistance: 0.7370-0.7450

Long term support: 0.6760-0.6800

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