CME traders preparing for a EUR reversal?
According to the COT (Commitments of Traders) reports provided by the Commodity Futures Trading Commission (CFTC) - for the week ended last Tuesday:
Large speculators (NON-COMMERCIAL) reduced the net position to buy EUR/USD by 0.8 thousand contracts to 84.4 thousand. Large speculative players cut their net buy position for the fifth week in a row. The net position is the lowest since the beginning of June 2020.
Hedgers (COMMERCIAL) reduced the net position for the sale of EUR/USD by 0.9 thousand contracts to 129.5 thousand. Hedger operators cut their net selling position for the fourth week in a row.
Open interest increased by 6.5 thousand contracts to 690.6 thousand.
The bullish index of large speculators (the ratio of the number of contracts for buying to the number of contracts for selling) remained unchanged at 1.76.
Summary: COT reports on the EUR/USD pair reflect some growth in bearish sentiment for the European currency. After a noticeable 3-week decline, traders slowed down this process, only slightly reducing the net position for the growth of the euro. At the same time, the net position has updated the levels that were the lowest for the last 9.5 months. The continuation of this trend may contribute to the decline of EUR/USD.
At the same time, a slowdown in the reduction of the net position may indicate a depletion of the trend and a possible corrective rebound up.
Note: COT report data is fundamental and is mainly used for medium and long-term trading. Large speculators, NON-COMMERCIAL (banks, investment funds) usually trade according to the trend. Hedgers, COMMERCIAL (operators, large companies) usually trade against the trend. The net position is the difference between the number of buy and sell contracts (the green line on the chart is the net position of large speculators; the blue line is the net position of hedgers). Open interest is the sum of all open positions in the market.