US dollar: bears not too strong?

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

For the past four weeks, large speculators (NON-COMMERCIAL) have been fluctuating between increasing and decreasing their net position to buy contracts on the dollar index. Recently, they have reduced their net position by 0.7 thousand contracts, bringing it down to 19 thousand. This is the lowest it has been since December 13 of last year.

Operator hedgers decreased the net position to sell contracts on the dollar index by 0.4 thousand contracts to 20.1 thousand for the second consecutive week. This marks the lowest net position since December 13 of last year, following a steady decline from its highest levels.

The open interest rose by 0.1 thousand contracts, bringing the total to 42.8 thousand.

The ratio of the number of contracts to buy to the number of contracts to sell for the bullish index of large speculators decreased by 0.11 over the week, bringing it down to 3.21.

The Commitment of Traders (COT) report on the dollar index (USDX) has revealed a growing bearish sentiment towards the US currency. Last week, large speculators joined hedgers who had already started to reduce their net position on dollar growth a week prior. The net position of large speculators also began to decrease from the highest levels seen in the past 10.5 months. Large funds decreased their purchases of USDX by 2%, while sales were also increased. If this trend continues, it could lead to a further decline of the US currency.

For the past three weeks, the net position has remained relatively flat, suggesting a lack of clarity in the market.

COT reporting data is essential for medium to long term trading. Large speculators, NON-COMMERCIAL (banks, investment funds) usually follow the trend (blue line). Small speculators, NONREPORTABLE POSITIONS, generally do not have a major impact on the market (red line). Hedgers, COMMERCIAL (operators, large companies) usually go 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.