US dollar: net position is ready to break through the “ceiling” of the current year

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 have been increasing their net position to buy contracts on the dollar index for the past four weeks, with the most recent net position reaching 16.8 thousand contracts - the highest since January 3. This is an increase of 1.1 thousand contracts from the previous week.

Hedgers (COMMERCIAL) increased their net position to sell contracts on the dollar index by 1.3 thousand contracts to 18.6 thousand, marking the fourth consecutive week of such an increase. This net position was the highest since January 31.

The open interest rose by 3.1 thousand contracts, bringing the total to 42.4 thousand.

The ratio of the number of buy contracts to the number of sell contracts for the bullish index of large speculators decreased from 2.75 to 2.70 over the week, due to an increase in sales.

Data from the COT dollar index (USDX) indicates a rise in bullish sentiment for the US dollar. After the quarterly expiration of currency futures, traders actively bought and sold, resulting in an increase in the net position for dollar growth. This has caused the net position of large speculators to reach its highest level in almost nine months. Large speculators increased their purchases by 8% over the week. If this trend continues, it could lead to further appreciation of the American currency.

Traders increased their positions to weaken the dollar, and some of them even anticipated a correction of the American currency.

COT reporting data is essential for medium to long term trading. Large speculators, NON-COMMERCIAL (banks, investment funds) usually trade in line with 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 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.