US Dollar: CME situation contrasts sharply with Forex

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

After two weeks of decline, large speculators (NON-COMMERCIAL) increased their net buying position on the dollar index by 0.5 thousand contracts, bringing the total to 3.4 thousand. This is the first rise in the net position since the beginning of July 2021, and it is close to the lowest level since then.

Hedgers (COMMERCIAL) increased their net position to sell contracts on the dollar index by 1.1 thousand contracts, bringing the total to 5 thousand. This increase in net position to sell came after a 2-week reduction.

The number of open contracts decreased by 0.2 thousand, bringing the total to 36.6 thousand.

The ratio of the number of buy contracts to the number of sell contracts for the bullish index of large speculators increased by 0.03 over the week, reaching a total of 1.17.

Data from the COT dollar index (USDX) indicates a rise in bullish sentiment for the US dollar. After two weeks of contraction, traders have increased their net position on the dollar's growth, with the net position beginning to rise from levels close to the lowest they have been in over two years. Large speculators have decreased their sales by 3% over the week. If this trend continues, it could lead to further growth of the American currency.

Traders did not open any purchases, but only closed sales. This is a strange situation compared to the forex market, where the DXY is near its six-month high.

COT reporting data is essential for medium to long term trading. Generally, large speculators, NON-COMMERCIAL (banks, investment funds) tend to follow the trend (blue line). Small speculators, NONREPORTABLE POSITIONS, however, usually do not have much of an effect 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.