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Positions of large speculators according to the COT report as at 15/3/2022

Total net speculator positions in the USD index fell by 5,664 contracts last week. This change is the result of a decrease in long positions by 6,264 contracts and a decrease in short positions by 600 contracts.
The decline in total net speculator positions occurred last week in the euro, the British pound and the Japanese yen.
The increase in total net positions occurred in the New Zealand dollar, the Australian dollar, the Canadian dollar and the Swiss franc.
The significant growth in positions of large speculators in the commodity currencies AUD, NZD and CAD can be explained by the rising prices of commodities exported by these countries.
A large number of options and futures contracts expired last week, which explains the large decline in open interest for each currency.

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 15, 2022

28380

18794

-29061

-44856

3653

-62340

17740

-5229

Mar 08, 2022

34044

58844

-12526

-78195

-12379

-55856

7646

-9710

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

 

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 15, 2022

666010

202040

183246

18794

-72980

-40643

-593

-40050

Weak bullish

Mar 08, 2022

738990

242683

183839

58844

19015

14298

20393

-6095

Weak bullish

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

       

Total Change

-19421

-11523

-601

-10922

 
 

COT-15-3-22-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 18 794 contracts last week and they are down by 40 050 contracts compared to the previous week. This change is due to a decrease in long positions by 40,643 contracts and an increase in short positions by 593 contracts. These data suggest a weakening of the bullish sentiment in the euro.

The open interest, which fell by 72,980 contracts in the last week, shows that the upward movement that occurred in the euro last week was not supported by a volume and it is therefore a weak price action.

The euro continues to weaken under the influence of the war in Ukraine. Last week it returned to a resistance level which could be an opportunity to trade short in the event of a downtrend. 

Long-term resistance: 1.1120 – 1.1150.
Support: 1.080-1.0850. The next support is at 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 15, 2022

188323

32442

61503

-29061

-57989

-18540

-2005

-16535

Bearish

Mar 08, 2022

246312

50982

63508

-12526

34443

3303

15492

-12189

Bearish

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

       

Total Change

4316

2845

8301

-5456

 
 

COT-15-3-22-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 amounted to -29,061 contracts and they are down by 16,535 contracts compared to the previous week. This change is due to a decrease in long positions by 18,540 contracts and a decrease in short positions by 2,005 contracts. This suggests bearish sentiment as the total net positions of large speculators are negative while there is also their further decline.
Open interest, which fell by 57,989 contracts last week, means that the rise in the pound price that occurred last week was not supported by volume and it is therefore a weak price action.
Risk off sentiment due to the war in Ukraine continues to weigh on the pound and therefore the pound is weakening strongly. Although the Bank of England raised interest rates by 0.25% to 0.75% last week, it also warned of a decline in economic growth as a result of the war in Ukraine. The change in central bank rhetoric is a bearish signal for the pound.

Long-term resistance: 1.3180-1.3210.  Next resistance is near 1.3270 – 1.3330.
Support is near 1.3000.  
 

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 15, 2022

124521

24281

69137

-44856

-72573

4760

-28579

33339

Weak bearish

Mar 08, 2022

197094

19521

97716

-78195

7427

6801

6660

141

Weak bearish

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

       

Total Change

-72392

5446

-29527

34973

 
 

COT-15-3-22-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 - 44 856 contracts, having increased by 33 339 contracts compared to the previous week. This change is due to an increase in long positions by 4,706 contracts and a decrease in short positions by 28,579 contracts. This data suggests a weakening of bearish sentiment in the Australian dollar.
Last week we saw a decline in open interest of 72,573 contracts. This means that the upward move that occurred last week was not supported by a volume and it was therefore a weak move as new money did not flow into the market.
The Australian dollar strengthened strongly again last week and reached a resistance level.

Long-term resistance: 0.7370-0.7440
Long-term support: 0.7160-0.7180.  A strong support is near 0.7080 – 0.7120.
 

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 15, 2022

39200

21493

17840

3653

-14050

5718

-10314

16032

Bullish

Mar 08, 2022

53250

15775

28154

-12379

2861

5290

3497

1793

Weak bearish

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

       

Total Change

-19267

2288

-13063

15351

 
 

COT-15-3-22-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 reached 3,653 contracts last week and they are up by 16,032 contracts compared to the previous week. This change is due to an increase in long positions by 5,718 contracts and a decrease in short positions by 10,314 contracts. This data suggests that there was bullish sentiment on the New Zealand dollar last week.
Open interest fell significantly by 14,050 contracts last week. Therefore, the upward movement in the NZDUSD that occurred last week was not supported by volume and therefore the move was weak.
The NZDUSD strengthened strongly last week and reached the resistance level.

Long-term resistance: 0.690 – 0.6930
Long-term support: 0.6730-0.6740 and the next support is at 0.6590 – 0.6600.
 

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.

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