What’s inside:
- US Dollar Index (DXY) large speculators increase short for 3rd week in a row, could prove to be untimely with long-term support at hand
- AUD traders reduce long position for first time in two months
- Silver net long increases for 3rd week in a row after nearly flipping short in July for first time in well over a decade
Check out the Q3 Forecasts for our outlook on currencies, commodities, and equity indices.
Each week on Friday the CFTC releases the Commitment of Traders (COT) report, which shows traders’ positioning in the futures market as it stands for the week ending on Tuesday. Displayed in the table below are the net positions of large speculators (i.e. hedge funds, CTAs, etc.); the change in their positioning from the prior week and where the net position stands compared relative to its 52-week range.
Noteworthy developments
US Dollar Index (DXY) – The dollar has been under pressure since the beginning of the year and large speculators have been dumping contracts the whole time, at a rate which has taken their net long position held for the past three years to net short as of three weeks ago. It’s the first time they have held a short position since June 2014. It comes at a time when DXY is trading down into long-term support dating as far back as 1998. The flip in positioning into support could prove to be untimely in the weeks ahead.
US Dollar Index (DXY): Monthly
Australian dollar – Large speculators reduced their net long position for the first time since the week of June 16. Last week was the largest position held since April 2013, when AUD was trading over 1.05. With the broad US Dollar Index (DXY) trading into support we could begin seeing a general shift away from long currencies versus USD. Last week may have marked the beginning of a shift towards a further unwinding of Aussie contracts.
Silver futures – Large specs added to their net long position for a third week in a row, bringing the total to nearly 34k contracts. This comes after nearly seeing a net long position which has been held for well over a decade flip short in July. It’s still a long way away from the record 100k+ net long position back in April. We’ve seen good strength recently out of precious metals and with them coming from ‘depressed’ levels and large trend-followers not holding a relatively large position it suggests there is money which could continue to be put to work.
The COT report is a longer-term sentiment indicator – for a short-term view on sentiment, check out IG Client Sentiment data.
Other futures contracts and large speculator positioning:
Paul conducts webinars every week from Tuesday-Friday. See the Webinar Calendar for details, and the full line-up of all upcoming live events.
—Written by Paul Robinson, Market Analyst
You can receive Paul’s analysis directly via email by signing up here.
You can follow Paul on Twitter at @PaulRobinonFX.