Academy News Positions of large speculators according to the COT report as at 8/3/2022

Positions of large speculators according to the COT report as at 8/3/2022

Total net speculator positions in the USD index fell by 730 contracts last week. This change is the result of an increase in long positions by 2,270 contracts and an increase in short positions by 3,000 contracts.
The decrease in total net speculator positions occurred last week in the euro, the British pound, and the Canadian dollar.
The increase in total net positions occurred in the New Zealand dollar, the Australian dollar, the Japanese yen and the Swiss franc.

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.

Table 1: Total net positions of large speculators
DatE	USD Index	EUR	GBP	AUD	NZD	JPY	CAD	CHF
Mar 08, 2022	34044	58844	-12526	-78195	-12379	-55856	7646	-9710
Mar 01, 2022	34774	64939	-337	-78336	-14172	-68732	14140	-15248
Feb 22, 2022	36084	59306	-5809	-84080	-11551	-63187	9253	-10987
Feb 15, 2022	35386	47581	2237	-86694	-9333	-66162	12170	-9715
Feb 08, 2022	33765	38842	-8545	-85741	-10366	-59148	14886	-9399
Feb 01, 2022	34571	29716	-23605	-79829	-11698	-60640	18264	-8239

Note: The explanation of COT methodolody is at the the end of the report.

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: this is information on the total net position of large speculators. This information shows the strength and sentiment of an ongoing trend. It is the indicator r_COT Large Speculators (by Kramsken) in www.tradingview.com.
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.
We show moving average SMA 100 (blue line) and EMA 50 (orange line) on daily charts.

Charts are made with the use of tradingview.com. The source of numerical data is www.myfxbook.com

The Euro

date	Open Interest	Specs Long	Specs Short	Specs Net positions	change Open Interest	change Long	change Short	change Net Positions	Sentiment
Mar 08, 2022	738990	242683	183839	58844	19015	14298	20393	-6095	Weak bullish
Mar 01, 2022	719975	228385	163446	64939	23293	14190	8557	5633	Bullish
Feb 22, 2022	696682	214195	154889	59306	-5365	-3704	-15429	11725	Bullish
Feb 15, 2022	702047	217899	170318	47581	1949	-1074	-9813	8739	Bullish
Feb 08, 2022	700098	218973	180131	38842	14667	5410	-3716	9126	Bullish
Feb 01, 2022	685431	213563	183847	29716	2479	155	1999	-1844	Weak bullish
				Total Change	56038	29275	1991	27284

COT-8-3-22-obr-1

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 58,844 contracts last week, down by 6,095 contracts from the previous week. This change is due to an increase in long positions by 14,198 contracts and an increase in short positions by 20,393 contracts. These data suggest a weakening of the bullish sentiment for the euro.
Open interest, which rose by 19,015 contracts in the past week, shows that the downward price action movement that occurred in the euro last week was supported by volume and it was therefore a strong trend.
The euro continues to weaken under the influence of the war in Ukraine and we can see that support levels have not been respected in such a strong trend. The ECB's announcement last week to end the bond purchases in 3Q 2022 also contributed to the euro’s weakness. This hawkish statement at a time when economic growth is slowing sparked fears of stagflation in the market and therefore the euro weakened following the ECB announcement.

Long-term resistance: 1.1120 – 1.1150.
Support: 1.080-1.0850. The next support is at 1.0640-1.0700.

The British pound

date	Open Interest	Specs Long	Specs Short	Specs Net positions	change Open Interest	change Long	change Short	change Net Positions	Sentiment
Mar 08, 2022	246312	50982	63508	-12526	34443	3303	15492	-12189	Bearish
Mar 01, 2022	211869	47679	48016	-337	23426	5430	-42	5472	Weak bearish
Feb 22, 2022	188443	42249	48058	-5809	-6859	-7902	144	-8046	Bearish
Feb 15, 2022	195302	50151	47914	2237	-2646	5442	-5340	10782	Bullish
Feb 08, 2022	197948	44709	53254	-8545	13941	15112	52	15060	Weak bearish
Feb 01, 2022	184007	29597	53202	-23605	1967	-7069	8773	-15842	Bearish
				Total Change	64272	14316	19079	-4763

COT-8-3-22-obr-2

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 - 12,526 contracts, having fallen by 12,189 contracts compared to the previous week. This change is due to the growth in long positions by 3,303 contracts and the growth in short positions by 15,492 contracts. This suggests bearish sentiment as the total net speculators positions are negative while there has been a further decline as well.

Open interest, which rose by 34,443 contracts last week, means that the fall in the pound that occurred last week was supported by the volume and it was therefore a strong price action.

Risk off sentiment due to the war in Ukraine continues to weigh on the pound as well as the euro and therefore the pound is weakening strongly.

Long-term resistance: 1.3180-1.3210. Next resistance is near 1.3270 – 1.3330.
Support is near 1.3000.

The Australian dollar

date	Open Interest	Specs Long	Specs Short	Specs Net positions	change Open Interest	change Long	change Short	change Net Positions	Sentiment
Mar 08, 2022	197094	19521	97716	-78195	7427	6801	6660	141	Weak bearish
Mar 01, 2022	189667	12720	91056	-78336	-2912	1167	-4577	5744	Weak bearish
Feb 22, 2022	192579	11553	95633	-84080	1	-139	-2753	2614	Weak bearish
Feb 15, 2022	192578	11692	98386	-86694	-3825	-5631	-4678	-953	Bearish
Feb 08, 2022	196403	17323	103064	-85741	-510	-1512	4400	-5912	Bearish
Feb 01, 2022	196913	18835	98664	-79829	6893	3714	270	3444	Weak bearish
				Total Change	7074	4400	-678	5078

COT-8-3-22-obr-3

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 78,195 contracts, up by 141 contracts compared to the previous week. This change is due to the growth in long positions by 6,801 contracts and the growth in short positions by 6,660 contracts. This data suggests a weakening of the bearish sentiment for the Australian dollar.

Last week we saw an increase in open interest of 7,427 contracts. This means that the downward movement that occurred last week was supported by volume as new money flowed into the market.

The Australian dollar weakened quite significantly last week. This may be explained by the fact that there has been a fall in prices in commodities that Australia exports (e.g. gold, coal). The decline in commodity prices also reflects efforts to find a diplomatic solution to the war in Ukraine.

Long-term resistance: 0.7370-0.7440
Long-term support: 0.7085-0.7120. A strong support is near 0.6960 – 0.6990.

The New Zealand dollar

date	Open Interest	Specs Long	Specs Short	Specs Net positions	change Open Interest	change Long	change Short	change Net Positions	Sentiment
Mar 08, 2022	53250	15775	28154	-12379	2861	5290	3497	1793	Weak bearish
Mar 01, 2022	50389	10485	24657	-14172	-6247	-6858	-4237	-2621	Bearish
Feb 22, 2022	56636	17343	28894	-11551	-7469	-7580	-5362	-2218	Bearish
Feb 15, 2022	64105	24923	34256	-9333	9228	7755	6722	1033	Weak bearish
Feb 08, 2022	54877	17168	27534	-10366	-3590	-2037	-3369	1332	Weak bearish
Feb 01, 2022	58467	19205	30903	-11698	5151	3257	4182	-925	Bearish
				Total Change	-66	-173	1433	-1606

COT-8-3-22-obr-4

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 a negative value last week - 12,379 contracts, having increased by 1,793 contracts compared to the previous week. This change is due to an increase in long positions by 5,290 contracts and an increase in short positions by 3,497 contracts. This data suggests that the bearish sentiment on the NZ dollar has weakened over the past week.

Open interest rose significantly by 2,861 contracts last week. The downward movement in the NZDUSD that occurred last week was therefore supported by volume and therefore the move was strong.

The weakening in the NZDUSD that occurred last week can be explained by the decline in the prices of commodities that New Zealand produces.

Long-term resistance: 0.6850 – 0.6920
Long-term support: 0.6590-0.6600 and the next support is at 0.6500 – 0.6530.

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.

Open Interest	Price action	Interpretation	Notes
Rising	Rising	Strong bullish market	New money flow in the particular asset, more bulls entered the market which pushes the price up. The trend is strong.
Rising	Falling	Strong bearish market	Price falls, more bearish traders entered the market which pushes the price down. The trend is strong.
Falling	Rising	Weak bullish market	Price is going up but new money do not flow into the market. Existing futures contracts expire or are closed. The trend is weak.
Falling	Falling	Weak bearish market	Price is going down, but new money do not flow into the market. Existing futures expire or are closed, the trend is weak.

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.

Open an account and trade with us!

Open Real Account

Open Demo Account

_{Your capital is at risk.}