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Positions of large speculators according to the COT report as at 25/1/2022

Total net speculator positions in the USD index rose by 427 contracts last week. This change is the result of a decrease in long positions by 597 contracts and a decrease in short positions by 1,024 contracts.
Bullish sentiment continued in the Euro currency futures contracts. Euro speculators raised their bullish positions for a sixth consecutive week this week. Over the last five-week time-frame, Euro positions have improved by a total of +30,043 contracts. This week’s net speculator standing marks the highest level for Euro since August 17th.
 
Positive changes in net speculator positions this week were in the yen, the Australian dollar, the Swiss franc, the Canadian dollar. The decline in net speculator positions was in the British pound, the New Zealand.
 

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.
 

 

25/1/2021

18/1/2022

11/1/2022

4/1/2022

28/12/2021

21/12/2021

USD index

36 861

36 434

37 892

39 078

36 789

35 115

EUR

31 560

24 584

6 005

-1 554

-6 634

1 506

GBP

-7 763

-247

-29 166

-39 171

-50 719

-57 686

AUD

-83 273

-88 454

-91 486

-89 366

-81 741

-80 354

NZD

-10 773

-8 331

-8 604

-8 845

-8 421

-6 136

JPY

-68 273

-80 879

-87 525

-62 262

-53 102

-52 286

CAD

12 317

7 492

-7 376

-11 025

-10 334

-9 877

CHF

-8 796

-10 810

-7 660

-9 529

-10 718

-9 227

Table 1: Total net positions of large speculators


Note: The explanation of COT and methodolody is in the Appendix 1 that you can find at 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 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.
  • 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 long positions of speculators

Weekly change in short positions of speculators

Sentiment

25.1.2022

-8 930

6 976

1 507

-5 469

Bullish

18.1.2022

9 589

18 579

7 540

-11 039

Bullish

11.1.2022

4 075

7 559

5 288

-2 271

Bullish

COT-28-1-22-obr-1

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


Total net speculator positions rose by 6,976 contracts last week. This change is due to an increase in long positions by 1,507 contracts and a decrease in short positions by 5,469 contracts. Large speculators closed 23,403 short positions and added 6,651 long positions over the past 5 weeks.
The euro broke support at 1.1220 last week and the cea stalled at support around 1.1120. EURUSD continues to move in a downtrend. The decline in open interest over the past week and the continued rise in total net positions suggests that this downtrend is weakening.

Long-term resistance: 1.1220 - 1.1240. Next resistance is near 1.1330.
Support: 1.1120 - 1.1170. Next support is near 1.1000.
 

The British Pound

 

Date

Weekly change in open interest

Weekly change in total net positions of speculators

Weekly change in long positions of speculators

Weekly change in short positions of speculators

Sentiment

25.1.2022

-1 194

-7 516

-3 094

4 422

Bearish

18.1.2022

-17 259

28 919

9 254

-19 665

Weakening bearish

11.1.2022

486

10 005

4 526

-5 479

Weakening bearish

 

COT-28-1-22-obr-2

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


Last week, the total net positions of speculators fell by 7,516 contracts. This state of total net positions over the past week is the result of a decrease in long positions by 3,094 contracts and an increase in short positions by 4,422 contracts. Open interest has declined by a total of 25,707 contracts over the past 5 weeks. The decline in open interest indicates a weakening of the current downtrend. Large speculators have added 15,842 long contracts and closed a total of 34,081 short contracts in the same period.
The pound has reached support at 1.3370, where the price is currently stalled. In the event of a breakout, a further decline to support at 1.3300 and possibly further around 1.3200 can be expected.

Long-term resistance: 1.3700-1.3750
Support is at: 1.3330 – 1.3370. The next support is near 1.3300.
 

The Australlian Dollar

 

Date

Weekly change in open interest

Weekly change in total net positions of speculators

Weekly change in long positions of speculators

Weekly change in short positions of speculators

Sentiment

25.1.2022

8 884

5 181

6 070

889

Weakening bearish

18.1.2022

-4 317

3 032

-3 332

-6 364

Weakening bearish

11.1.2022

5 346

-2 120

-249

1 871

Bearish

 

COT-28-1-22-obr-3

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


Last week, the total net positions of speculators rose by 5,181 contracts. This change is due to the growth of long positions by 6,070 contracts and the growth of short positions by 889 contracts. Total open interest over the past 5 weeks is negative 1,289 contracts. This means that the current trend is weak. However, there has been a strong growth in open interest in the last week which could indicate a trend reversal given the growth in total net positions. 
There has been a sharp weakening in the Australian dollar over the past week due to risk-off sentiment on US equity indices, with which the pair is often correlated. Price stopped at a very significant support at 0.7000.

Long-term resistance: 0.7080-0.7100, then near 0.7130-0.7150 and especially in 0.7280-0.7310.
Long-term support: 0.6960-0.7010
 

The New Zealand Dollar 

Date

Weekly change in open interest

Weekly change in total net positions of speculators

Weekly change in long positions of speculators

Weekly change in short positions of speculators

Sentiment

25.1.2022

8 589

-2 442

4 336

6 778

Bearish

18.1.2022

2 661

273

652

379

Weakening bearish

11.1.2022

1 764

241

1 543

1 302

Weakening bearish

 

COT-28-1-22-obr-4

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


Last week, total net positions fell by 2,442 contracts. The change in total net positions is the result of an increase in long positions by 4,336 contracts and an increase in short positions by 6,778 contracts.  Open interest over the past 5 weeks has been rising, indicating a strong ongoing trend.
The New Zealand Dollar has broken support at 0.6700 and also 0.6600, which has now become a new resistance. 

Long-term resistance: 0.6600 and then 0.6700 – 0.6710.
Long-term support: 0.6490-0.6530

 

Appendix 1: 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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