Positions of large speculators according to the COT report as at 21/6/2021

Total net speculator positions in the USD index fell by 4,100 contracts last week. This change is the result of a decrease in long positions by 6,300 contracts and a decrease in short positions by 2,200 contracts.

 

The increase in total net speculator positions occurred last week in the euro, the British pound and the Swiss franc.

 

Decreases in total net positions occurred in the Canadian dollar, Australian dollar, New Zealand dollar and Japanese yen.

 

There was a significant strengthening of the US dollar last week. This was due to the US Fed meeting, which indicated that interest rates could be raised earlier than expected, as early as in 2023.

 

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.

 

	21/6/2021	11/6/2021	4/6/2021	28/5/2021	21/5/2021	14/5/2021
USD index	-2,300	1,800	3,000	2,800	2,700	2,500
EUR	118,200	107,200	109,300	104,000	99,900	93,900
GBP	32,200	27,700	24,100	30,700	24,900	28,200
AUD	-17,900	-9,400	-1,900	-800	3,000	2,400
NZD	3,300	5,500	5,900	8,600	8,400	9,300
CAD	44,300	45,300	48,800	46,100	38,600	25,900
CHF	9,400	1,100	300	-1,200	-4,300	-2,900
JPY	-46,900	-37,300	-47,100	-50,200	-50,900	-41,700

_{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
21/6/2021	-48,400	11,000	-21,300	-32,300	Bullish
11/6/2021	1,100	-2,100	-5,300	-3,200	Weakening bullish
4/6/2021	3,900	5,300	1,300	-4,100	Bullish

 

Total net speculator positions rose by 11,000 contracts last week. This change is due to a decrease in long positions by 21,300 contracts and a decrease in short positions by 32,300 contracts.

The price of the euro weakened last week due to the strengthening of the US dollar, which was supported by the monetary policy of the US Fed, which hinted that an interest rate hike could occur as early as in 2023. Currently, the price of the pair has reached support at the rising trend line.

Long-term resistance: 1.2240 - 1.2350

Long-term support: 1.1700 - 1.1750
 

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
21/6/2021	-15,500	4,500	-4,000	-8,500	Bullish
11/6/2021	-2,900	3,600	-5,000	-8,600	Bullish
4/6/2021	5,100	-6,600	0	-6,600	Weakening bullish

 

Last week, the total net positions of speculators grew by 4,500 contracts. This change is the result of a decrease in long positions by 4,000 and a decrease in short positions by 8,500 contracts.

The pound weakened strongly last week due to the strengthening of the US dollar.

 

Long-term resistance: 1.42-1.4350

 

Long-term support: 1.3670-1.3700
 

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
21/6/2021	-24,500	-8,400	-8,000	400	Bearish
11/6/2021	13,500	-7,500	-7,200	300	Bearish
4/6/2021	400	-1,100	300	1,400	Bearish

 

Last week, speculators' total net positions fell by 8,400 contracts. This change is due to a decrease in long positions by 8,000 and an increase in short positions by 400 contracts.

The Australian dollar weakened strongly last week and fell below the first support level. If it goes back above this zone, then it will be a false break.

Long-term resistance: 0.7870-0.8000

 

Long-term support: 0.7530-0.7600
 

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
21/6/2021	-7,900	-2,200	-3,500	-1,200	Weakening bullish
11/6/2021	-450	-400	-2,700	-2,300	Weakening bullish
4/6/2021	2,000	2,700	200	2,900	Weakening bullish

Last week, total net positions fell by 2,200 contracts. This change is the result of a decrease in long positions by 3,500 and a decrease in short contracts by 1,200.

The NZD weakened significantly last week and reached the support level.

Resistance: 0.7370-0.7450

The nearest support: 0.6900-0.6960