US dollar: speculators are actively increasing sales and purchases

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

After a two-week increase, large speculators (NON-COMMERCIAL) decreased their net buying position on the dollar index by 0.5 thousand contracts, bringing it down to 12.2 thousand. This is the first time the net position has dropped from its peak since April 11.

Hedgers (COMMERCIAL) decreased their net selling position on dollar index contracts by 1.1k contracts to 15.2k. After a two-week period of increasing their net position, Hedgers-operators have now reduced it. The net position has been decreasing since reaching its peak on March 21.

The open interest rose by 1,600 contracts to a total of 33,900.

The ratio of the number of buy contracts to the number of sell contracts for the bullish index of large speculators decreased by 0.17 over the course of the week, bringing it to 1.97.

The COT report data on the dollar index (USDX) has revealed a growing bearish sentiment towards the US currency. After a two-week build, traders began to reduce their net position on USD growth. Additionally, the net position of large speculators has decreased from its maximum levels over the past almost two months. Large funds have increased their sales by 13% in a week, which could potentially lead to a further decline of the US currency if this trend continues.

Large speculators were actively buying up the dollar, and some of them were optimistic that the dollar would continue to rise.

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 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, while open interest is the total of all open positions in the market.