Positions of large speculators according to the COT report as at 22/3/2022

The Euro

Figure 1: The euro and COT positions of large speculators on a weekly chart and the EURUSD on D1
 

The total net positions of speculators reached 23,843 contracts last week, up by 5,049 contracts compared to the previous week. This change is due to an increase in long positions by 5,011 contracts and a decrease in short positions by 38 contracts. These data suggest bullish sentiment for the euro.
Open interest fell by 7,193 contracts last week. This shows that the downward movement that occurred in the euro last week was not supported by the volume and is therefore a weak trend.
The euro continues to move in a downtrend. It returned to a resistance level last week, which could be an opportunity to trade short. 
Long-term resistance: 1.1120 – 1.1150.
Support: 1.080-1.0850. The next support is at 1.0650-1.0700. The support can b also a value around 1.0900.

The British pound

Figure 2: The GBP and COT positions of large speculators on a weekly chart and the GBPUSD on D1

The total net positions of speculators last week reached - 37,244 contracts, down by 8,183 contracts compared to the previous week. This change is due to the growth of long positions by 311 contracts and the growth of short positions by 8,494 contracts. This suggests bearish sentiment as the total net positions of large speculators are negative while there has been a further decline.
Open interest rose by 7,389 contracts last week. This means that the modest rise in the pound that occurred last week was supported by the volume and is therefore strong.
However, the pound's growth was not significant. In addition, a pin bar formed on the weekly chart which would suggest more of a further weakening in line with sentiment.
Long-term resistance: 1.3270 – 1.3300.
Support is near 1.3000.  

The Australian dollar

Figure 3: The AUD and COT positions of large speculators on a weekly chart and the AUDUSD on D1

The total net positions of speculators last week reached - 51,189 contracts, down by 6,333 contracts compared to the previous week. This change is due to a decrease in long positions by 534 contracts and an increase in short positions by 5,799 contracts. This data suggests a continuation of bearish sentiment in the Australian dollar.
Last week there was an increase in open interest of 3,246 contracts. This means that the upward move that occurred last week was supported by the volume and was therefore strong as new money flowed into the market.
The Australian dollar strengthened strongly again last week and reached a significant resistance level.

Long-term resistance: 0.7510-0.7560                                                                                                              
Long-term support: 0.7370-0.7440.  A strong support is near 0.7160 – 0.7180.

The New Zealand dollar

Figure 4: The NZD and the position of large speculators on a weekly chart and the NZDUSD on D1

The total net positions of speculators reached 2,520 contracts last week, down by 1,133 contracts from the previous week. This change is due to a decrease in long positions by 4,337 contracts and a decrease in short positions by 3,204 contracts. This data suggests that there was a weakening of bullish sentiment in the New Zealand dollar last week.
Open interest fell by 3,944 contracts last week. Therefore, the upward movement in the NZDUSD that occurred last week was not supported by the volume and therefore the move was weak.
The NZDUSD strengthened strongly last week and reached the resistance level.
Long-term resistance: 0.6980 – 0.7000
Long-term support: 0.6860-0.6920 and the next support is at 0.6730 – 0.6740.

Explanation to the COT report

• The COT report shows the positions of major participants in the futures markets. Futures contracts are derivatives and are essentially agreements between two parties to exchange an underlying asset for a predetermined price on a predetermined date. They are standardised, specifying the quality and quantity of the underlying asset. They are traded on an exchange so that the total volume of these contracts traded is known.

• Open interest: open interest is the sum of all open futures contracts (i.e. the sum of short and long contracts) that exist on a given asset. OI increases when a new futures contract is created by pairing a buyer with a seller. The OI decreases when an existing futures contract expires at a given expiry time or by settlement.
• Low or no open interest means that there is no interest in the market. High open interest indicates high activity and traders pay attention to this market. A rising open interest indicates that there is demand for the currency. That is, a rising OI indicates a strong current trend. Conversely, a weakening open interest indicates that the current trend is not strong.

• 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. Traders should try to trade in the direction of these large speculators.
• 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.
• The COT data are usually reported every Friday and they show the status on Tuesday of the week.
• 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.