US dollar: hedgers broke through the April "bottom"

The Commodity Futures Trading Commission (CFTC) COT (Commitments of Traders) reports for the week ending on Tuesday last week showed:

Large speculators (NON-COMMERCIAL) decreased their net buying position on the dollar index by 0.9k contracts to 11.1k. This marks the third week in a row that large speculators have reduced their net buying position, after having built it up for almost 6 weeks. The net position is now the lowest it has been since May 16.

Hedgers (COMMERCIAL) decreased their net sell position on dollar index contracts by 2,000 contracts to 11,600. This marks the third consecutive week that hedger operators have reduced their net sell position, which is now lower than it was in April and is the lowest it has been since the start of July 2021.

The open interest rose by 12.1k contracts, bringing the total to 41k.

The ratio of the number of buy contracts to the number of sell contracts for the bullish index of large speculators decreased by 0.70 over the course of the week, bringing it to a total of 1.68.

The COT report data on the dollar index (USDX) shows that bearish sentiment on the US currency is increasing. Traders have been actively selling and buying, resulting in a decrease in the net position for the dollar's growth. Additionally, the net position of large speculators is close to the lowest levels seen in the past two years, and the net position of hedgers has been updated. If this trend continues, it could lead to a decrease in the value of the US dollar.

COT report data is essential for medium and long-term trading, and is mainly used by large speculators, NON-COMMERCIAL (banks, investment funds). These traders usually follow the trend (blue line). Small speculators, NONREPORTABLE POSITIONS, however, have little influence 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, while open interest is the total of all open positions in the market.