Positions of large speculators according to the COT report as at 7/5/2021

The total net positions of speculators in the USD index fell by 600 contracts last week. This change is the result of a decrease in net long positions by 1,800 contracts and a decrease in net short positions by 1,100 contracts.

 

The total net positions of speculators increased last week in the euro, the Australian dollar, the New Zealand dollar, the Canadian dollar, the Swiss franc and the Japanese yen.

 

The decline in the total net positions of speculators occurred in the pound.

 

There is still a risk on sentiment in the market as US stock indices hovering near their historic highs and the Dow Jones 30 setting a new historic high last week. In such environment, commodity currencies and the euro tend to strengthen.

 

In addition to that, the recent developments in the US dollar pairs have been determined by developments in the US long-term bond yields. They fell last week and the US dollar weakened. However, in the event of their further stronger growth, it cannot be ruled out that the dollar could start to strengthen again.

 

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.

 

	7/5/2021	30/4/2021	23/4/2021	16/4/2021	9/4/2021	2/4/2021
USD index	2,100	2,700	3,500	6,000	4,400	5,700
EUR	84,800	81,000	80,800	66,900	67,500	73,700
GBP	19,800	29,200	25,200	25,600	20,000	25,000
AUD	1,500	-1,400	-1,800	3,800	4,100	12,300
NZD	8,600	7,000	4,300	2,500	3,100	4,000
CAD	25,900	15,722	13,200	2,400	2,700	6,500
CHF	100	-700	-1,600	800	3,200	4,300
JPY	-41,500	-48,500	-59,800	-58,300	-58,000	-59,500

_{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 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.

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
7.5.2021	5,300	3,800	6,000	2,200	Býčí
30.4.2021	10,400	200	3,300	3,100	Býčí
23.4.2021	13,000	13,900	6,500	-7,400	Býčí

 

The total net positions of speculators grew by 3,800 contracts last week. This change is due to an increase in long positions by 6,000 contracts and an increase in short positions by 2,200 contracts.

The price of the euro strengthened strongly last week and broke the declining line of resistance. After testing it back as a new support, we can expect a further strengthening of the euro against the dollar.

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
7.5.2021	-8,500	-9,400	-7,700	1,700	Slábnoucí býčí
30.4.2021	-3,000	-4,000	-1,100	-5,100	Býčí
23.4.2021	15,500	-400	8,200	8,600	Slábnoucí býčí

 

Last week, the total net position of speculators fell by 9,400 contracts. This change is the result of a decrease in net long positions by 7,700 contracts, while net short positions increased by 1,700 contracts.

The pound strengthened strongly against the US dollar last week.

 

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
7.5.2021	-3,100	2,900	-1,400	-4,200	Býčí
30.4.2021	4,600	400	3,000	2,600	Slábnoucí medvědí
23.4.2021	-3,500	-5,600	-7,300	-1,700	Medvědí

 

Last week, the total net positions of speculators grew by 2,900 contracts. This change is due to a decrease in long positions by 1,400 and a decrease in short positions by 4,200 contracts.

The Australian dollar strengthened strongly last week in line with risk on sentiment and is currently in the resistance zone.

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
7.5.2021	400	1,600	500	-1,100	Býčí
30.4.2021	3,500	2,700	4,200	1,500	Býčí
23.4.2021	2,200	1,800	2,000	200	Býčí

Last week, total net positions grew by 1,600 contracts. This change is the result of an increase in long contracts by 500 and a decrease in short contracts by 1,100.

The NZDUSD also strengthened strongly last week in line with risk on sentiment. The movement of the NZDUSD pair is also strongly correlated with the AUDUSD.

Resistance: 0.7370-0.7450

The nearest support: 0.6900-0.6960