Is the US dollar poised to rise?

The Commodity Futures Trading Commission (CFTC) reported, for the week ending last Tuesday, that the Commitments of Traders (COT) reports showed.

For the third consecutive week, large speculators (NON-COMMERCIAL) have increased their net position to purchase contracts on the dollar index, bringing the total to 20.7 thousand contracts. This is the highest net position since December 13 of last year.

Hedgers (COMMERCIAL) increased their net position to sell contracts on the dollar index by 0.4 thousand contracts to 20.7 thousand, marking the third consecutive week of increases. This net position was the highest since October 17.

The number of open contracts decreased by 0.9 thousand, bringing the total to 37.9 thousand.

The ratio of the number of contracts to buy to the number of contracts to sell for the bullish index of large speculators rose by 0.02 to 3.64 over the course of the week.

Data from the COT dollar index (USDX) indicates a growing bullish sentiment for the US dollar. For the third consecutive week, traders have increased their net position on dollar growth. Additionally, the net position of large speculators has reached its highest level in the past 11 months. Furthermore, the net position of hedgers is on the brink of surpassing the highs of October and this year. If this trend continues, it could lead to further appreciation of the US dollar.

Large speculators increased their sales while simultaneously expecting the USD to keep dropping in value.

The most recent COT report was postponed due to US holidays. COT reporting data is essential and is mainly used for medium to long-term trading. Generally, large speculators, NON-COMMERCIAL (banks, investment funds) trade in line with the trend (blue line). Small speculators, NONREPORTABLE POSITIONS, however, do not usually have a great impact on the market (red line). Hedgers, COMMERCIAL (operators, large companies) usually trade against the trend (black line). The net position is the difference between the number of buy and sell contracts. Open interest is the total of all open positions in the market.