Positions of large speculators according to the COT report as at 3/12/2021

Total net speculator positions in the USD index rose by 100 contracts last week. This change is the result of a decrease in long positions by 5,100 contracts and a decrease in short positions by 5,200 contracts.

The decline in total net positions occurred in all other currencies tracked except the Japanese yen, which bounced off the bottom in an environment of risk-off sentiment.

Speculators' positions in the yen have been negative since March 2021, when contracts fell into negative territory. Bearish sentiment reached a short-term high just five weeks ago on November 2, when speculators' total net positions fell to a total of -107,600 contracts. Since that week, sentiment in the Japanese yen has improved by a total of +28,758 contracts.
 

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.
 

	3/12/2021	26/11/2021	19/11/2021	12/11/2021	5/11/2021	29/10/2021
USD index	35,900	35,800	34,900	35,400	35,000	34,500
EUR	-23,200	-16,500	-3,800	3,800	-6,100	-11,300
GBP	-38,900	-34,600	-31,600	-12,100	15,000	15,000
AUD	-80,200	-63,300	-61,200	-63,400	-75,500	-75,200
NZD	10,600	13,900	14,000	12,900	13,900	8,900
CAD	-14,100	-3,100	8,700	-5,100	4,200	3,300
CHF	-14,200	-11,400	-8,900	-17,000	-20,600	-19,400
JPY	-78,900	-97,300	-93,100	-105,400	-107,600	-107,000

_{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.

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
3/12/2021	-6,300	-6,700	-13,200	-6,500	Bearish
26/11/2021	6,000	-12,700	6,000	18,700	Bearish
19/11/2021	27,300	-7,600	5,600	13,200	Bearish

 

Total net speculator positions fell by 6,700 contracts last week. This change is due to a decrease in long positions by 13,200 contracts and a decrease in short positions by 6,500 contracts.

The euro moved in a sideways range last week. Overall, however, the pair is still in a downtrend with resistance at the downward sloping 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
3/12/2021	17,100	-4,300	2,000	6,300	Bearish
26/11/2021	6,200	-3,000	-300	2,700	Bearish
19/11/2021	20,200	-19,500	-3,600	15,900	Bearish

 

Last week, the total net positions of speculators fell by 4,300 contracts. This increase in total net positions over the past week is the result of a 2,000 contract increase in long positions and a 6,300 contract increase in short positions.

The pound has been falling over the past week, confirming the continued down trend. However, the price is now at the support  level at 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
3/12/2021	300	-16,900	-7,300	9,600	Bearish
26/11/2021	21,300	-2,100	9,800	11,900	Bearish
19/11/2021	9,400	2,200	6,900	4,700	Weakening bearish

 

Last week, the total net positions of speculators fell by 16,900 contracts. This change is due to a decrease in long positions by 7,300 contracts and an increase in short positions by 9,600 contracts.

The Australian dollar weakened strongly last week under the influence of risk-off sentiment brought about by the news of a new coronavirus variant. The AUDUSD broke support at 0.7160, which has now become resistance. Price is currently trading in the area of strong support at 0.7000.

Long-term resistance: 0.7100-0.7130
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
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
19/11/2021	-500	1,100	1,100	0	Bullish

Last week, total net positions fell by 3,300 contracts. The change in total net positions is the result of an increase in long positions by 2,600 contracts and an increase in short positions by 5,900 contracts. 

The New Zealand dollar also weakened strongly last week in risk-off sentiment and broke through a strong support at 0.6800, which is now a new resistance.

Long-term resistance: 0.6800-0.6820
Long-term support: 0.6700