CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69.50% of retail investors lose their capital when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Positions of large speculators according to the COT report as at 1/3/2022

Total net speculator positions in the USD index fell 1,310 contracts last week. This change is the result of 35 contracts increase in long positions and a 1,345 contracts increase in short positions.
Growth in total net speculator positions occurred last week in the euro, the British pound, the Australian dollar, and the Canadian dollar.
Decreases in total net positions occurred in the New Zealand dollar, the Japanese yen, and the Swiss franc.  

Following Russia's invasion to Ukraine, markets shifted into risk-off sentiment. This means that especially the euro and the pound are weakening. The Australian dollar and New Zealand dollar are strengthening due to rising prices of commodities that these countries export.

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.

Table 1: Total net positions of large speculators

DatE

USD Index

EUR

GBP

AUD

NZD

JPY

CAD

CHF

Mar 01, 2022

34774

64939

-337

-78336

-14172

-68732

14140

-15248

Feb 22, 2022

36084

59306

-5809

-84080

-11551

-63187

9253

-10987

Feb 15, 2022

35386

47581

2237

-86694

-9333

-66162

12170

-9715

Feb 08, 2022

33765

38842

-8545

-85741

-10366

-59148

14886

-9399

Feb 01, 2022

34571

29716

-23605

-79829

-11698

-60640

18264

-8239

Jan 25, 2022

36861

31560

-7763

-83273

-10773

-68273

12317

-8796


Note: The explanation of COT methodolody is at the the end of the report.
 

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: this is information on the total net position of large speculators. This information shows the strength and sentiment of an ongoing trend. It is the indicator r_COT Large Speculators (by Kramsken) in www.tradingview.com.
  • 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.​
  • We show moving average SMA 100 (blue line) and EMA 50 (orange line) on daily charts.


​Charts are made with the use of www.tradingview.com. The source of numerical data is www.myfxbook.com

The Euro

 

date

Open Interest

Specs Long

Specs Short

Specs Net positions

change Open Interest

change Long

change Short

change Net Positions

Sentiment

Mar 01, 2022

719975

228385

163446

64939

23293

14190

8557

5633

Bullish

Feb 22, 2022

696682

214195

154889

59306

-5365

-3704

-15429

11725

Bullish

Feb 15, 2022

702047

217899

170318

47581

1949

-1074

-9813

8739

Bullish

Feb 08, 2022

700098

218973

180131

38842

14667

5410

-3716

9126

Bullish

Feb 01, 2022

685431

213563

183847

29716

2479

155

1999

-1844

Weak bullish

Jan 25, 2022

682952

213408

181848

31560

-8930

1507

-5469

6976

Bullish

       

Total change

28093

16484

-23871

40355

 
 

COT-1-3-22-obr-1

Figure 1: The euro and COT positions of large speculators on a weekly chart and the EURUSD on D1

 

The total net positions of speculators reached 64,939 contracts last week, which is an increase by 5,633 contracts compared to the previous week. This change is due to an increase in long positions by 14,190 contracts and an increase in short positions by 8,557 contracts. These data suggest continued bullish sentiment in the euro.
Open interest, which has increased by 23,293 contracts in the last week, shows that the downward movement that occurred in the euro last week was supported by volume and is therefore strong.
The euro is weakening sharply under the influence of the war in Ukraine and we can see that support levels have not been respected in such a strong trend. In a strong downtrend it is very risky to try to catch the bottom and open bullish long positions. 

Long-term resistance: 1.0980 – 1.1010. Next resistance is near 1.1120 – 1.1150.
Support: 1.0640-1.0700

The British pound

date

Open Interest

Specs Long

Specs Short

Specs Net positions

change Open Interest

change Long

change Short

change Net Positions

Sentiment

Mar 01, 2022

211869

47679

48016

-337

23426

5430

-42

5472

Weak bearish

Feb 22, 2022

188443

42249

48058

-5809

-6859

-7902

144

-8046

Bearish

Feb 15, 2022

195302

50151

47914

2237

-2646

5442

-5340

10782

Bullish

Feb 08, 2022

197948

44709

53254

-8545

13941

15112

52

15060

Weak bearish

Feb 01, 2022

184007

29597

53202

-23605

1967

-7069

8773

-15842

Bearish

Jan 25, 2022

182040

36666

44429

-7763

-1194

-3094

4422

-7516

Bearish

       

Total change

28635

7919

8009

-90

 
 

COT-1-3-22-obr-2

Figure 2: The GBP and COT positions of large speculators on a weekly chart and the GBPUSD on D1

 

The total net positions of speculators last week reached to -337 contracts, having increased by 5,472 contracts compared to the previous week. This change is due to an increase in long positions by 5,430 contracts and a decrease in short positions by 42 contracts. This suggests bearish sentiment, but it is weak as the total net positions of large speculators increased.
Open interest, which rose by 23,426 contracts last week, means that the fall in the pound that occurred last week was supported by volume and is therefore strong.
Risk off sentiment due to the war in Ukraine continues to weigh on the pound as well as the euro and therefore the pound is weakening strongly.

Long-term resistance: 1.3270-1.3300.  Next resistance is near 1.3420 – 1.3440. The resistance is also in the zone 1.3490 – 1.3520.
Support is near 1.3150 – 1.3200.  
 

The Australian dollar

 

date

Open Interest

Specs Long

Specs Short

Specs Net positions

change Open Interest

change Long

change Short

change Net Positions

Sentiment

Mar 01, 2022

189667

12720

91056

-78336

-2912

1167

-4577

5744

Weak bearish

Feb 22, 2022

192579

11553

95633

-84080

1

-139

-2753

2614

Weak bearish

Feb 15, 2022

192578

11692

98386

-86694

-3825

-5631

-4678

-953

Bearish

Feb 08, 2022

196403

17323

103064

-85741

-510

-1512

4400

-5912

Bearish

Feb 01, 2022

196913

18835

98664

-79829

6893

3714

270

3444

Weak bearish

Jan 25, 2022

190020

15121

98394

-83273

8884

6070

889

5181

Weak bearish

       

Total change

8531

3669

-6449

10118

 
 

COT-1-3-22-obr-3

Figure 3: The AUD and COT positions of large speculators on a weekly chart and the AUDUSD on D1

 

The total net positions of speculators last week reached to - 78,336 contracts, up by 5,744 contracts compared to the previous week. This change is due to an increase in long positions by 1,167 contracts and a decrease in short positions by 4,577 contracts. This data suggests a weakening of bearish sentiment in the Australian dollar.
However, last week we saw a decline in open interest by 2,912 contracts. This means that the upward movement that occurred last week in the AUDUSD was weak because new money did not flow into the market.
The Australian dollar has been strengthening strongly recently, which is explained by the rise in the prices of commodities that Australia exports. These commodities include coal, gas and gold. 

Long-term resistance: 0.7520-0.7560                                                                                                             
Long-term support: 0.7085-0.7120.  A strong support is near 0.6960 – 0.6990.
 

The New Zealand dollar

 

date

Open Interest

Specs Long

Specs Short

Specs Net positions

change Open Interest

change Long

change Short

change Net Positions

Sentiment

Mar 01, 2022

50389

10485

24657

-14172

-6247

-6858

-4237

-2621

Bearish

Feb 22, 2022

56636

17343

28894

-11551

-7469

-7580

-5362

-2218

Bearish

Feb 15, 2022

64105

24923

34256

-9333

9228

7755

6722

1033

Weak bearish

Feb 08, 2022

54877

17168

27534

-10366

-3590

-2037

-3369

1332

Weak bearish

Feb 01, 2022

58467

19205

30903

-11698

5151

3257

4182

-925

Bearish

Jan 25, 2022

53316

15948

26721

-10773

8589

4336

6778

-2442

Bearish

       

Total change

5662

-1127

4714

-5841

 
 

COT-1-3-22-obr-4

Figure 4: The NZD and the position of large speculators on a weekly chart and the NZDUSD on D1
 

 

The total net positions of speculators last week reached a value of - 14,172 contracts, having fallen by 2,621 contracts compared to the previous week. This change is due to a decrease in long positions by 6,858 contracts and a decrease in short positions by 4,237 contracts. This data suggests that the bearish sentiment for the NZD continues.

Last week, open interest fell significantly by 6,247 contracts. Therefore, the upward movement in the NZDUSD that occurred last week is not supported by volume and therefore the price action was weak.
The strengthening of the NZDUSD that occurred last week is somewhat surprising given the geopolitical tensions in Ukraine and risk off sentiment. What helped the NZD rise are rising prices of commodities  such as milk, which New Zealand produces.

Long-term resistance: 0.6850 – 0.6890
Long-term support: 0.6590-0.6600 and the next support is at 0.6500 – 0.6530.
 

Explanation to the COT report

  • The COT report shows the positions of major participants in the futures markets. Futures contracts are derivatives and are essentially agreements between two parties to exchange an underlying asset for a predetermined price on a predetermined date. They are standardised, specifying the quality and quantity of the underlying asset. They are traded on an exchange so that the total volume of these contracts traded is known.

 

  • Open interest: open interest is the sum of all open futures contracts (i.e. the sum of short and long contracts) that exist on a given asset. OI increases when a new futures contract is created by pairing a buyer with a seller. The OI decreases when an existing futures contract expires at a given expiry time or by settlement.
  • Low or no open interest means that there is no interest in the market. High open interest indicates high activity and traders pay attention to this market. A rising open interest indicates that there is demand for the currency. That is, a rising OI indicates a strong current trend. Conversely, a weakening open interest indicates that the current trend is not strong.

Open Interest

Price action

Interpretation

Notes

Rising

Rising

Strong bullish market

New money flow in the particular asset, more bulls entered the market which pushes the price up. The trend is strong.

Rising

Falling

Strong bearish market

Price falls, more bearish traders entered the market which pushes the price down. The trend is strong.

Falling

Rising

Weak bullish market

Price is going up but new money do not flow into the market. Existing futures contracts expire or are closed. The trend is weak.

Falling

Falling

Weak bearish market

Price is going down, but new money do not flow into the market. Existing futures expire or are closed, the trend is weak.

 

  • 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. Traders should try to trade in the direction of these large speculators.
  • 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.
  • The COT data are usually reported every Friday and they show the status on Tuesday of the week.
  • 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.