US dollar: speculators pushed the net position to a 2-year bottom

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

For the fourth consecutive week, large speculators (NON-COMMERCIAL) decreased their net buying position on the dollar index by 5 thousand contracts, bringing it down to 6.1 thousand. This is the lowest net position since the start of July 2021, and is even lower than the levels seen in May.

Hedgers (COMMERCIAL) have decreased their net sell position on dollar index contracts by 5.3 thousand contracts, bringing it down to 6.3 thousand. This marks the fourth consecutive time that hedgers-operators have reduced their net sell position, and the lowest it has been since the start of July 2021.

The number of open contracts decreased by 6.5 thousand, bringing the total to 34.5 thousand.

The ratio of the number of buy contracts to the number of sell contracts for the bullish index of large speculators decreased by 0.28 over the week, bringing it to 1.40.

The Commitment of Traders (COT) report data on the dollar index (USDX) has revealed a significant rise in bearish sentiment towards the US currency. Over the past week, traders have significantly reduced their net position on the dollar's growth. Furthermore, the net position of large speculators has reached its lowest level in two years, while the net position of hedgers has been updated. Major funds have decreased their dollar purchases by 22% in the last week. If this trend continues, it could lead to a decrease in the value of the US currency.

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.