Positions of large speculators according to the COT report as at 1/10/2021

Total net speculator positions in the USD index rose by 1,400 contracts last week. This change is the result of an increase in long positions by 8,200 contracts and an increase in short positions by 6,800 contracts.

Total net speculator positions in the USD index are the highest in last 98 weeks. The last time bullish positions in the USD were this high was in November 2019, when total net speculator positions reached 27,800 contracts. Speculators' positions in the USD have been rising for 14 of the last 15 weeks.

The increase in total net speculator positions occurred last week in the British pound, the New Zealand dollar and the Canadian dollar.

Declines in total net positions occurred in the euro, the Australian dollar, the Swiss franc, and the Japanese yen.  

Last week saw larger corrections in equity indices. These corrections took place in the context of rising yields on 10-year US Treasuries, which reached their highest levels since February 2020.

Along with this risk-off sentiment, the US dollar strengthened. In particular, there was more weakness in the euro, the British pound, the Swiss franc and the New Zealand dollar.

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.
 

	1/10/2021	24/9/2021	17/9/2021	10/9/2021	3/9/2021	27/8/2021
USD index	26,500	25,100	24,300	21,500	20,700	20,400
EUR	900	12,100	27,800	26,300	10,500	24,600
GBP	2,000	-200	4,800	-24,500	-14,900	-16,700
AUD	-86,400	-85,600	-83,400	-70,500	-60,100	-56,600
NZD	10,200	8,100	6,200	3,900	-2,100	-400
CAD	-20,200	-27,900	-9,300	-6,000	-2,800	5,900
CHF	-11,600	-9,200	-5,900	200	4,000	4,100
JPY	-64 800	-56,100	-60,300	-62,300	-63,100	-66,700

_{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.
 

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
1/10/2021	4,500	-11,200	5,700	16,900	Weakening bullish
24/9/2021	10,400	-15,700	2,900	18,600	Weakening bullish
17/9/2021	-43,600	1,500	-3,400	-4,900	Bullish

 

Total net speculator positions fell by 11,200 contracts last week. This change is due to the growth of long positions by 5,700 contracts and the growth of short positions by 19,600 contracts.

The price of the euro continued to weaken last week and broke through support at 1.16.

Long-term resistance: 1.1870 - 1.1900

Long-term support: 1.1350 - 1.1500

 

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
1/10/2021	11,900	2,200	6,000	3,800	Bullish
24/9/2021	17,300	-5,000	7,700	12,800	Bearish
17/9/2021	-58,800	29,300	14,800	-14,500	Bullish

 

Last week, the total net positions of speculators grew by 2,200 contracts. The change in total net positions over the past week is the result of long positions growing by 6,000 contracts and short positions growing by 3,800 contracts.

The pound weakened against the US dollar last week, first breaking through support at 1.36 and continuing to fall by another 200 pips. New support is in the band around 1.34.

Long-term resistance: 1.3900-1.3980

Long-term support: 1.3350-1.3400

 

 

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
1/10/2021	-4,600	-800	-6,300	-5,500	Bearish
24/9/2021	20,800	-2,200	11,600	13,800	Bearish
17/9/2021	-8,800	-12,900	-19,400	-6,500	Bearish

 

 

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
1/10/2021	-3,000	2,100	-1,400	-3,500	Bullish
24/9/2021	1,000	1,900	2,100	200	Bullish
17/9/2021	-22,400	2,300	-2,500	-4,800	Bullish

Last week, total net positions rose by 2,100 contracts. The change in total net positions is the result of a decrease in long positions by 1,400 contracts and a decrease in short positions by 3,500 contracts.

The New Zealand dollar weakened significantly last week. The RBNZ will decide on rates this week. The central bank is expected to raise rates slightly. This should be positive news for New Zealand dollar bulls.

Resistance: 0.7130-0.7160

Long term support: 0.6760-0.6800