Positions of large speculators according to the COT report as at 14/6/2022

The Euro

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

The total net positions of speculators last week reached to -6,018 contracts, down by 56,561 contracts compared to the previous week. This change is due to a decrease in long positions by 23,262 contracts and an increase in short positions by 33,299 contracts. This data suggests bearish sentiment as the total net positions are negative while there has been a decline in them.
Open interest fell by 62,503 contracts in the last week. This shows that the move that occurred in the euro last week was not supported by the volume and was therefore a weak price action.
The price has bounced off support which is in the band at 1.0400. Overall, the EUR/USD pair is still in a downtrend. The reason for this is the ECB's relatively mild approach towards inflation. The ECB announced to raise the rate by 0.25% from July, which is a much smaller increase than that implemented by the US Fed. 
Long-term resistance: 1.0620 – 1.0650. The next resistance is at 1.0770-1.0780.
Support: 1.0340 – 1.0420
 

The British pound

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

The total net positions of speculators last week reached - 65 596 contracts, having increased by          5 214 contracts compared to the previous week. This change is due to a decrease in long positions by 5,275 contracts and a decrease in short positions by 10,489 contracts. This suggests weak bearish sentiment as the total net positions of large speculators are negative, but at the same time there has been an increase in them.
Open interest fell by 20,301 contracts last week, indicating that the downward movement in the pound that occurred last week was not supported by volume and is therefore weak price action.
The Bank of England raised interest rates by 0.25% last week in line with analysts' expectations. This hike is much more modest than the Fed's aggressive approach, which is why the pound remains under pressure and is moving in a downtrend. Last week, a weekly pin bar candlestick formed on the pound, suggesting the possibility of a temporary correction in the downtrend. 
Long-term resistance: 1.2440 – 1.2476.    

Support: 1.1930 – 1.2000
 

The Australian dollar

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

The total net positions of speculators reached 43,254 contracts last week, up by 4,642 contracts compared to the previous week. This change is due to a decrease in long positions by 60 contracts and a decrease in short positions by 4,702 contracts. This data suggests a weak bearish sentiment on the Australian dollar as the total net positions of large speculators are negative, but at the same time there was an increase in the previous week.
Last week saw a decline in open interest of 23,565 contracts. This means that the downward movement that occurred last week was not supported by the volume and was therefore a weak price action.
The Australian dollar is moving in a downtrend. However, last week it reached a significant support level and we can see that further downside move was rejected at this level. Thus, there could be a temporary correction in the downtrend.
Long-term resistance: 0.7250-0.7260                                                                                                              

Long-term support: 0.6830-0.6850  (the support zone begins at 0.6930 according to a weekly chart).
 

The New Zealand dollar

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

Total net speculator positions last week reached -6,838 contracts, up 12,933 contracts from the previous week. This change is due to an increase in long positions of 2,584 contracts and a decrease in short positions of 10,349 contracts. This data suggests that there has been a weakening of bearish sentiment on the New Zealand dollar over the past week, as the total net positions of large speculators are negative, but there has also been an increase in them.
Open interest fell by 18,130 contracts last week. Thus, the downward movement in the NZD/USD that occurred last week was not supported by the volume and therefore the move was weak.
The NZD/USD bounced off the support band at 0.6220. As with the Aussie dollar, the pair is in a downtrend. A rejection of further decline at that support could suggest the possibility of a temporary correction of this bearish trend.
Long-term resistance: 0.6540 – 0.6570
Long-term support: 0.6190 – 0.6220
 

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.

• 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.