Positions of large speculators according to the COT report as at 10/12/2021

The total net positions of speculators in the USD index fell by 1,000 contracts last week. This change is the result of an increase in long positions by 1,000 contracts and an increase in short positions by 2,000 contracts.

A significant decline in bearish positions in the Japanese yen occurred last week. Speculators on the yen reduced bearish positions for the fourth time in five weeks. During these 5 weeks, the total net position of speculators in the yen increased by 44,500 contracts from a total of -107,600 contracts to -63,100 contracts.

In addition to the yen, total net positions also rose in the euro, the British pound, the Canadian dollar, the Swiss franc and the New Zealand dollar.

The decline in total net positions occurred in the Australian dollar.
 

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.

 

	10/12/2021	3/12/2021	26/11/2021	19/11/2021	12/11/2021	5/11/2021
USD index	34,900	35,900	35,800	34,900	35,400	35,000
EUR	-8,300	-23,200	-16,500	-3,800	3,800	-6,100
GBP	-38,300	-38,900	-34,600	-31,600	-12,100	15,000
AUD	-81,800	-80,200	-63,300	-61,200	-63,400	-75,500
NZD	10,700	10,600	13,900	14,000	12,900	13,900
CAD	-9,400	-14,100	-3,100	8,700	-5,100	4,200
CHF	-12,100	-14,200	-11,400	-8,900	-17,000	-20,600
JPY	-63,100	-78,900	-97,300	-93,100	-105,400	-107,600

_{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.

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 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
10/12/2021	10,800	14,900	3,800	-11,100	Weakening bearish
3/12/2021	-6,300	-6,700	-13,200	-6,500	Bearish
26/11/2021	6,000	-12,700	6,000	18,700	Bearish

 

The total net positions of speculators rose by 14,900 contracts last week. This change is due to an increase in long positions by 3,800 contracts and a decrease in short positions by 11,100 contracts.
 
The euro moved sideways last week. Overall, however, the pair is still in a declining trend with resistance at the declining trend line.

Long-term resistance: 1.1350 - 1.1370
Long-term support: 1.1150 - 1.1180

 

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
10/12/2021	7,900	600	-3,100	-3,700	Weakening bearish
3/12/2021	17,100	-4,300	2,000	6,300	Bearish
26/11/2021	6,200	-3,000	-300	2,700	Bearish

 

Last week, the total net positions of speculators rose by 600 contracts. This state of total net positions over the last week is the result of a decrease in long positions by 3,100 and a decrease in short positions by 3,700 contracts.

The pound strengthened slightly last week and rebounded from support, which is in the range of around 1.3200.

Long-term resistance: 1.3350-1.3360
Long-term support: 1.3150-1.3210

 

 

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
10/12/2021	10,200	-1,600	200	1,800	Bearish
3/12/2021	300	-16,900	-7,300	9,600	Bearish
26/11/2021	21,300	-2,100	9,800	11,900	Bearish

 

Last week, the total net positions of speculators fell by 1,600 contracts. This change is due to the growth of long positions by 200 contracts and the growth of short positions by 1,800 contracts.

A strong bull candle has formed on the weekly chart in the Australian dollar. With this growth, the price broke through the first resistance and the Australian is now moving near the next resistance, which is in the area around 0.7180.

Long-term resistance: 0.7170-0.7180
Long-term support: 0.6980-0.7000

 

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
10/12/2021	6,500	100	1,400	1,300	Bullish
3/12/2021	5,000	-3,300	2,600	5,900	Weakening bullish
26/11/2021	1,600	-100	1,400	1,500	Weakening bullish

Last week, overall net positions rose by 100 contracts. The change in total net positions is the result of an increase in long positions by 1,400 contracts and an increase in short positions by 1,300 contracts.

The New Zealand dollar also strengthened last week. This move created a new support, which is at the price 0.6740. The price stopped rising at resistance in the area at 0.6820.

Long-term resistance: 0.6800-0.6820
Long-term support: 0.6730-0.6740