US dollar: bulls won't give up

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

Non-commercial large speculators increased their net position to purchase contracts on the dollar index by 0.9 thousand contracts, bringing the total to 19.9 thousand. This follows a weekly decrease, yet these large speculative players have been increasing their net position for 4 out of the last 5 weeks. The net position is nearing the highest levels seen since December 13 of last year.

Hedgers (COMMERCIAL) have been steadily increasing their net position for selling contracts on the dollar index for the past 5 weeks, with the most recent increase of 1.3 thousand contracts bringing the total to 19.6 thousand.

The open interest rose by 1.1 thousand contracts, bringing the total to 40.5 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 0.45 to 3.42 over the course of the week.

Data from the COT dollar index (USDX) indicates a rise in bullish sentiment for the US dollar. After a week-long hiatus, traders resumed accumulating their net position in favor of the dollar's appreciation. Furthermore, the net position of large speculators is again nearing its highest levels in the past year. Over the course of the week, large speculators decreased their sales by 15%. If this trend continues, it could lead to further strengthening of the US dollar.

For the past two months, the net position has remained unchanged, suggesting that the market is uncertain.

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 much 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.