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Positions of large speculators according to the COT report as at 6/8/2021

Total net speculator positions in the USD index rose by 2,400 contracts last week. This change is the result of an increase in long positions by 1,700 contracts and a decrease in short positions by 600 contracts.

An increase in total net speculator positions occurred last week in the pound, the Canadian dollar and the Japanese yen.

A decrease in total net positions occurred in the euro, the Australian dollar, the New Zealand dollar, and the Swiss franc.

Friday's NFP was a strong positive surprise as the US economy created 943k new jobs in July. The dollar reacted to the report by strong strengthening. This data is considered by some analysts as a game changer and they expect that the Fed might start raising rates faster than expected after the last Fed meeting. Inflation data will be presented this week. If data beats expectations it would probably support further US dollar appreciation.

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.

 

 

6/8/2021

30/7/2021

23/7/2021

16/7/2021

9/7/2021

2/7/2021

USD index

18,900

16,500

12,200

11,300

7,600

-400

EUR

38,000

38,100

45,800

59,700

77,200

87,200

GBP

-100

-5,700

-3,500

8,000

21,900

17,700

AUD

-41,300

-39,300

-35,700

-28,800

-24,900

-17,800

NZD

-300

1,400

3,000

3,200

1,800

3,100

CAD

7,500

5,400

12,900

26,400

41,200

45,800

CHF

7,500

8,500

8,000

7,100

10,200

11,100

JPY

-55,200

-59,900

-55,700

-56,300

-69,100

-69,900

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

6/8/2021 -3,500 -100 -3,200 -3,100 Weakening bullish
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
 
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 100 contracts last week. This change is due to a decrease in long positions by 3,200 contracts and a decrease in short positions by 3,100 contracts.

The price of the euro weakened strongly last week after Friday's NFP data from the US and fell below the 1.18 level.

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

6/8/2021 -4,500 4,600 1,900 -3,700 Bearish
30/7/2021 -3,400 -2,200 -3,000 -800 Bearish
23/7/2021 16,400 -11,500 -500 11,000 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 increased by 4,600 contracts, but the total positions are still in negative zone. This change is the result of an increase in long positions of 1,900 contracts and a decrease in short positions of 3,700 contracts.

The pound has generally weakened slightly against the US Dollar over the past week following Friday's NFP. The UK central bank left rates unchanged at Thursday's meeting.

 

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

6/8/2021 2,000 -2,000 300 2,300 Bearish
30/7/2021 4,300 -3,600 400 4,000 Bearish
23/7/2021 7,600 -6,900 400 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 2,000 contracts. This change is due to an increase in long positions by 300 and an increase in short positions by 2 300 contracts.

The Australian dollar initially strengthened strongly last week after the Bank of Australia meeting, but Friday's US data caused the AUDUSD to weaken.

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

6/8/2021 -1,200 -1,700 -2,500 -800 Bearish
30/7/2021 400 -1,600 -1,200 400 Weakening bullish
23/7/2021 1,100 -200 0 -200 Weakening 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 1,700 contracts, the result of a 2,500 drop in long positions and an 800 contracts decrease in short positions.

The NZD continues to hover near the 0.6920 support level, which has been tested several times. In the event of strong inflation data, the NZDUSD pair could fall towards the next support level.

Resistance: 0.7370-0.7450

Long term support: 0.6760-0.6800

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