Positions of large speculators according to the COT report as at 29/1/2021

Total net positions in the USD index fell by 400 contracts last week. This change is the result of a decrease in net long positions by 100 and an increase in net short positions by 300 contracts.

The overall net positions in the USD index have been negative for twelve weeks in a row. So big market players continue to bet on the dollar's weakness. This indicates that according to these players, the strengthening of the dollar, which we saw last week, could only be a correction.

The decline in total net positions occurred in the British pound, the Australian dollar, the New Zealand dollar and the Japanese yen.

The increase in total net positions occurred in the euro, the Canadian dollar and the Swiss franc last week.
 

The positions of speculators in individual currencies

	29/1/2021	22/1/2021	15/1/2021	8/1/2020	4/1/2021	28/12/2020
USD index	-14,700	-14,300	-13,900	-15,000	-14,600	-14,900
EUR	165,300	163,500	155,900	143,000	143,100	143,900
GBP	8,000	13,700	12,900	3,700	4,800	6,000
AUD	800	4,900	5,500	- 3,900	-6,500	- 4,400
NZD	14,800	16,000	14,700	12,000	12,500	13,700
CAD	13,800	10,300	12,100	14,500	15,400	10,100
CHF	10,100	9,400	12,000	9,400	11,800	12,200
JPY	45,000	50,000	50,500	50,200	47,300	46,100

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
+ 1,800	1,500	- 300	bullish

Total net positions rose by 1,800 contracts last week. This change is the result of an increase in net long positions by 1,500 contracts and a decrease in net short positions by 300 contracts. So big players continue to bet on strengthening in the euro.

However, the price of the euro weakened slightly last week due to risk off sentiment, which was reflected in a decline in stock indices. Currently, the price reaches support, which is indicated by a growing trend line.

Long-term resistance: 1.2250 - 1.2340

Actual support: 1.2050-1.2060

Long-term support: 1.1950 - 1.2000
 

The British Pound

Weekly change in total net positions	Weekly change in total long positions	Weekly change in total short positions	Sentiment
- 5,700	1,500	7,200	bullish

Last week, total net positions fell by 5,700 contracts. This change is the result of an increase in net long positions by 1,500 contracts, while net short positions increased by 7,200 contracts.

The pound strengthened very slightly last week and is currently in the area of ​​resistance.

Long-term resistance: 1.37-1.3820

Long-term support: 1.33-1.3500
 

The Australlian Dollar

Weekly change in total net positions	Weekly change in total long positions	Weekly change in total short positions	Sentiment
- 4,100	- 3,600	500	weakening bullish

Last week, total net positions fell by 4,100 contracts. This change is the result of a decrease in net long positions by 3,600 contracts, while net short positions increased by 500 contracts.

The Australian dollar weakened relatively strongly last week due to risk off sentiment on the SP 500 stock index, which the Australian dollar correlates with. The AUDUSD is now in the support zone, which is defined by a rising trend line.

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
- 1,200	200	1,400	bullish

In the New Zealand dollar, total net positions are still in bullish sentiment, which has been going on for 24 weeks in a row. Last week, however, total net positions fell by 1,200 contracts. This change is the result of an increase in net long contracts by 200 contracts and an increase in net short contracts by 1,400.

The NZDUSD price opened last week and closed at the same values.

Resistance: 0.7230-0.7320

The nearest support: 0.7050-0.7100