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Positions of large speculators according to the COT report as at 5/7/2022

Total net speculator positions on the USD index fell by 3,978 contracts last week to 39,251 contracts. Total net speculator positions on the USD index fell for the second week in a row, falling below 40 000 contracts. Overall, the USD index has been in bullish sentiment since July 6, 2021.
Total net speculators positions on the euro fell further for the fourth time in the last five weeks. During this period, speculators total net positions have fallen by gigantic 69,124 contracts and are at their lowest level since November 30, 2021. The euro seems to be heading inevitably towards parity on the USD pair.
There were also declines in total net speculators positions on the British pound, the Australian dollar, the New Zealand dollar, the Japanese yen, the Canadian dollar and the Swiss franc.

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

Jul 07,
2022

39,251

-16,852

-56,208

-47,621

-7,056

-54,445

4,293

-10,135

Jun 28, 2022

43,229

-10,596

-53,118

-42,980

-5,311

-52,570

9,097

-19673

Jun 21, 2022

45,010

-15,605

-63,247

-40,606

-5,423

-58,454

4,105

-8,591

Jun 14, 2022

44476

-6018

-65596

-43254

-6838

-69755

23202

-6808

Jun 7,

2022

   37938

50543

-70810

-47896

-19771

-91646

-1062

-16132

May 31, 2022

37538

52272

-74105

-48682

-18724

-94439

-7007

-20458

 

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

Jul 05, 2022

673772

197138

213990

-16852

2300

7724

13980

-6256

Bearish

Jun 28, 2022

671,472

189414

200010

-10596

-246

-6140

-11149

5009

Weak
Bullish

Jun 21, 2022

671,718

195,554

211,159

211,159

-15,605

-15,605

-12289

18591

Bullish

Jun 14, 2022

668164

206986

213004

-6018

-62503

-23262

33299

-56561

Bearish

Jun 07, 2022

730667

230248

179705

50543

24350

-6305

-4576

-1729

Weak bullish

May 31, 2022

706317

236553

184281

52272

-2621

-519

-13861

13342

Bullish

       

Total Change

-35,166

-39,934

15,848

-55,782

 
 

COT-5-7-22-obr-1

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 amounted to -16,852 contracts, down by 6,256 contracts compared to the previous week. This change is due to the growth of long positions by 7,724 contracts and the growth of short positions by 13,980 contracts. This data suggests bearish sentiment as the total net positions are negative while there has been a decline.
Open interest is up by 2,300 contracts in the last week. This shows that the downward movement that occurred in the euro last week was supported by the volume and is therefore a strong price action.
The price continued its strong decline last week and it seems that reaching parity on the EUR/USD pair is only a matter of time. The fundamental reasons for the downtrend are still in place - aggressive Fed policy, a more moderate ECB policy and the ongoing war in Ukraine.
Long-term resistance: 1.0350 – 1.0380
Support: 1.00
 

The British pound

DatE

Open Interest

Specs Long

Specs Short

Specs Net positions

Change Open Interest

Change Long

change Short

change Net Positions

Sentiment

Jul 05, 2022

240926

39618

95826

-56208

12190

4434

7524

-3090

Bearish

Jun 28, 2022

228736

35184

88302

-53118

470

6714

-3415

10129

Weak bearish

Jun 21, 2022

228266

28470

91717

-63247

-10056

-873

-3222

2349

Weak
Bearish

Jun 14, 2022

238,322

29,343

94,939

-65,596

-20,301

-5,275

-10,489

5,214

Weak bearish

Jun 7, 2022

258623

34618

105428

-70810

5742

3830

535

3295

Weak bullish

May 31, 2022

252881

30788

104893

-74105

-983

4852

-1415

6267

Weak bearish

       

Total Change

-12,938

13,682

-10,482

24,164

 
 

COT-5-7-22-obr-2

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 56,208 contracts, down by 3,090 contracts compared to the previous week. This change is due to the growth in long positions by 4,434 contracts and the growth of short positions by 7,524 contracts. This suggests bearish sentiment as the total net positions of large speculators are negative and at the same time there has been a decline in them.
Open interest has risen by 12,190 contracts in the past week, indicating that the move in the pound that occurred last week was supported by the volume and it was therefore weak price action.
The British Pound continued to weaken on the US Dollar pair last week, breaking through the 1.20 level with a strong daily candlestick. Overall, the British pound is in a strong downtrend.
 Long-term resistance: 1.2350 – 1.2400. The resistance is also 1.20.    Support: 1.1870 – 1.1920
 

The Australian dollar

 

DatE

Open Interest

Specs Long

Specs Short

Specs Net positions

Change Open Interest

Change Long

Change Short

Change Net Positions

Sentiment

Jul 05, 2022

146950

27622

75243

-47621

7059

-1265

3376

-4641

Bearish

Jun 28, 2022

139891

28887

71867

-42980

2874

-2858

-484

-2374

Bearish

Jun 21, 2022

137,017

31,745

72,351

-40,606

-5,840

85

-2,563

2,648

Weak bearish

Jun 14, 2022

142857

31660

74914

-43254

-23565

-60

-4702

4642

Weak bearish

Jun 7, 2022

166422

31720

79616

-47896

12761

-1177

-1963

786

Weak bearish

May 31, 2022

153661

32897

81579

-48682

-4954

-3682

-446

-3236

Bearish

       

Total Change

 

-11665

 

-8957

 

-6782

 

-2175

 
 

COT-5-7-22-obr-3

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 last week reached 47,621 contracts, down by 4,641 contracts compared to the previous week. This change is due to a decrease in long positions by 1,265 contracts and an increase in short positions by 3,376 contracts. This data suggests bearish sentiment on the Australian dollar, as the total net positions of large speculators are negative while at the same time there was a decline in them in the previous week.
There was an increase in open interest of 7,059 contracts last week. This means that the move that occurred last week was supported by volume and it was therefore a strong price action.
The Aussie dollar is at a level of significant support where a reaction has occurred and the Aussie has strengthened a little in the past week. This is a temporary correction in an overall downtrend. 
Long-term resistance: 0.7040 – 0.7070
Long-term support: 0.6760-0.6780

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

Jul 05, 2022

45403

13634

20690

-7056

5066

1914

3659

-1745

Bearish

Jun 28, 2022

40337

11720

17031

-5311

-2552

-2932

-3044

112

Bearish

Jun 21, 2022

42889

14652

20075

-5423

-2,521

-242

-1,657

1,415

Weak bearish

Jun 14, 2022

45410

14894

21732

-6838

-18130

2584

-10349

12933

Weak bearish

Jun 7, 2022

63540

12310

32081

-19771

8406

3131

4178

-1047

Bearish

May 31, 2022

55134

9179

27903

-18724

-4145

-1570

-2167

597

Weak bearish

       

Total Change

 

-11665

 

-8957

 

-446

 

-3,236

 
 

COT-5-7-22-obr-4

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

The total net positions of speculators last week amounted to -7,056 contracts, down by 1,745 contracts compared to the previous week. This change is due to an increase in long positions by 1,914 contracts and an increase in short positions by 3,659 contracts. This data suggests that there was bearish sentiment on the New Zealand dollar over the past week, as the overall net positions of large speculators have been negative, while there has been a further decline.
Open interest rose by 5,066 contracts last week. The move in NZD/USD that occurred last week was therefore supported by volume and therefore the move was strong.
The NZD/USD is moving very similarly to the AUD/USD pair in a downtrend and the pair has approached an area of significant support.
Long-term resistance: 0.6360 – 0.6400
Long-term support: 0.6120 – 0.6140
 

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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