Positions of large speculators according to the COT report as at 12/2/2021

Total net positions in the USD index rose by 900 contracts last week. This change is the result of a decrease in net short positions by 900 contracts. The total net positions in the USD index have been negative for fourteen weeks in a row. The US dollar weakened at the end of last week. According to the COT index, the positions of large speculators are at extreme values, however, from the point of view of price action analysis, the reversal of the trend has not been confirmed yet. The dollar could thus continue its downtrend.

The increase in total net positions occurred in the euro and the British pound. By contrast, total net positions fell in the Australian dollar, the New Zealand dollar, the Japanese yen, the Canadian dollar and the Swiss franc.

Risk on sentiment persists in the markets and the SP500 stock index reached a new high last week. This could be favorable for commodity currencies, but also for the euro and the British pound, which could strengthen.
 

The positions of speculators in individual currencies

	12/2/2021	5/2/2021	29/1/2021	22/1/2021	15/1/2021	8/1/2020
USD index	-13,900	-14,800	-14,700	-14,300	-13,900	-15,000
EUR	140,200	137,000	165,300	163,500	155,900	143,000
GBP	21,100	9,700	8,000	13,700	12,900	3,700
AUD	-200	-1,500	800	4,900	5,500	- 3,900
NZD	11,500	11,600	14,800	16,000	14,700	12,000
CAD	9,500	16,100	13,800	10,300	12,100	14,500
CHF	11,400	14,600	10,100	9,400	12,000	9,400
JPY	34,600	44,600	45,000	50,000	50,500	50,200

Table 1: Total net positions of large speculators

 

Notes:

Large speculators are traders who trade large volumes of futures contracts, which, if the required 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 of long-term trends.

Total net positions are the difference between the number of bullish long contracts and the number of bearish short contracts. The data is published every Friday and is delayed because it shows the status on Tuesday of the week.

The sentiment of large speculators will allow you to see what position this group occupies in the market. It is important to monitor the overall trend of total net positions, but also separately the trend of bearish short positions and the trend of bullish long positions. Extreme values ​​of total net positions are also important as they often serve as signals of a trend reversal.

It is also important to monitor the turning points, when the total net positions change from bullish sentiment to bearish and vice versa. These inflection points are indicated in the graphs in section 3.

The chart compares the current value of the total net positions of large speculators with the value 3 years ago. A score of 0% means that speculators are at their lowest levels in 3 years. A score of 100% means that speculators are at the highest values ​​in the last 3 years. A value of 80% or more means that speculators are extremely bullish, and a value of 20% or less means that speculators are extremely bearish.
 

Detailed analysis of selected currencies

Explanations:
 

• Purple line and histogram in the chart window: this is information on the overall net position of large speculators.

• Green linein 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.

Charts are made with the use of www.tradingview.com.

 

Euro

Weekly change in total net positions	Weekly change in total long positions	Weekly change in total short positions	Sentiment
3,200	4,000	800	bullish

Total net positions grew by 3,200 contracts last week. This change is due to an increase in net long positions by 4,000 contracts and an increase in net short positions by 800 contracts.

The euro price strengthened last week and rejected broken support on the low rising line. This confirmed a false break. In situations where there is a false break, there is a higher probability of moving in the original direction, i.e. in the case of the euro in the long direction and the euro could therefore strengthen further.
 

Long-term resistance: 1.2250 - 1.2340

Long-term support: 1.1940 - 1.2000
 

The British Pound

Weekly change in total net positions	Weekly change in total long positions	Weekly change in total short positions	Sentiment
11,400	6,800	-4,600	bullish

Last week, total net positions rose by 11,400 contracts. This change is the result of an increase in net long positions by 6,900 contracts, while net short positions decreased by 4,500 contracts.

The pound continued to strengthen last week, breaking the resistance threshold at around 1.38 and continuing to grow.
 

Long-term resistance: 1.42-1.4350

Long-term support: 1.37-1.38200
 

The Australlian Dollar

Weekly change in total net positions	Weekly change in total long positions	Weekly change in total short positions	Sentiment
1,300	200	-1,100	weak bearish

Last week, total net positions grew by 1,300 contracts, but they are still in a negative bearish zone. However, current developments suggest that there could soon be a shift to bullish sentiment.

The Australian dollar strengthened slightly last week due to the risk on sentiment in the SP 500 stock index,which the Australian dollar correlates with. We can understand the growing trend line as the current support.
 

Long-term resistance: 0.7750-0.7820

Long-term support: 0.7600-0.7650
 

The New Zealand Dollar

Weekly change in total net positions	Weekly change in total long positions	Weekly change in total short positions	Sentiment
- 100	- 1,400	- 1,200	bullish

In the New Zealand dollar, total net positions are still in bullish sentiment, which has been going on for 26 weeks in a row. Last week total net positions fell by 100 contracts. This change is the result of a decrease in net long contracts by 1,400 and a decrease in net short contracts by 1,300.

The NZDUSD price strengthened slightly last week. As with the Australian dollar, the NZDUSD can be expected to strengthen given the risk on sentiment and the new high on the SP 500 index.

Resistance: 0.7230-0.7320

The nearest support: 0.7050-0.7100