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Positions of large speculators according to the COT report as at 6/11/2020

The total net positions of large speculators further decreased as speculators decreased their positions in 6th consecutive week. The decline in total net positions happened also in the British pound. This development is probably caused by uncertainties regarding Brexit as the final trade agreement has not been concluded yet. Surprising sharp decline in total net positions occurred in the Australian dollar. On the other hand, the speculators continued to raise the total net positions in the Japanese yen and bullish run continues also in the New Zealand dollar. 

The positions of speculators in individual currencies

Table 1: Total net positions of large speculators
  6.11.2020
30.10.2020
 

23.10.2020
 

16.10.2020
 

9.10.2020
 

2.10.2020
 
USD index
700
 
 -1 300  -1 700 450 -3 000 -5 500
EUR 140,300 155 600 166 000 168 600 174 300 188 100
GBP -11,200 -6 700 -2 000 -9 800 -11 300 -12 700
AUD -1,300 8 900 6 800 3 900 10 800 8 900
NZD 7 000 7 000 6 600 6 500 5 100 4 900
CAD -20,700 - 18 000 -19 100 -13 600 -18 000 -18 900
CHF 14,900 15 500 14 400 12 200 13 100 12 700
JPY 28,100 17 900 14 200 20 000 21 100    24 800

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 overall net positions change from bullish sentiment to bearish and vice versa. These inflection points are indicated in the graphs in section 3.
 

Strength of individual currencies for the period of last 3 years

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 in the graph 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. 
 

The euro

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

The total net positions of speculators have been in the euro in bullish territory since March 23, 2020. However, the total net positions are at an extreme bullish value. At extreme values, there is a possibility of reversing the trend. Over the last 6 weeks, total net positions were declining and are currently at their lowest levels in 15 weeks. 

The total net positions decreased by 15,300 contracts last week. This decrease is probably due to the development of the coronavirus in Europe. Uncertainties regarding Brexit can be also reflected in it.

The euro rose after the American presidential election last week and it is approaching the first resistance level.  


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 are currently in the bearish zone. The bearish sentiment is probably result of uncertainties regarding Brexit agreement. The bearish total net positions rose by 4,500 contracts last week. However, this result is more due to decline in long contracts, which was bigger than decline in short contracts as it can be seen in the indicator window.   

Note: we have plotted inflection points in the graph 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

The total net positions surprisingly fell by 10,200 contracts last week and they reached negative value where they were 11. 9. 2020 last time. There is probably reflected the fact that on Tuesday when such positions are reported, it was not clear who will be American president. For the change in the sentiment it will be necessary to wait for next report.

The price reached the first level of support and after that it continuously rose after it became clearer that the new US president will be Joe Biden. 


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

The total net positions of large speculators are still in bullish sentiment which has been running since August 17, 2020. The total net positions rose by 100 contracts last week. 

The price reached the nearest resistance zone. After its break, there is free space for the price to move to the resistance 2. 



The nearest long-term resistance: 0.6760-0.6800
Resistance 2: 0.6920-0.6970
The nearest long-term support: 0.6500-0.6550 
 

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