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 for the purchase of contracts on the dollar index by 1.2 thousand contracts to 1.8 thousand. Large speculative players began to reduce their net buy position after a 4-week build-up. The net position began to decline from the highest levels since April 20.
Hedgers (COMMERCIAL) increased the net position for selling contracts on the dollar index by 0.03 thousand contracts to 5.9 thousand. Hedger operators slightly increased their net selling position.
Open interest increased by 1.5 thousand contracts to 49.6 thousand.
The bullish index of large speculators (the ratio of the number of contracts for buying to the number of contracts for selling) fell by 0.05 to 1.06 for the week
Summary: COT reports on the US dollar index (USDX) reflect the growth of bearish sentiment on the US currency among major speculators. After a month-long build-up, large funds began to reduce their net position on the dollar's rise. At the same time, the net position began to decline from the highs for a month and a half, becoming the minimum for the last three months. Large funds increased sales by 11% for the week. The continuation of this trend may contribute to the decline of the US currency.
At the same time, large speculators continued to increase purchases, and some of them did not rule out the continuation of the dollar's growth.
The net position of hedgers was almost unchanged during the week. If they join the big speculators next week, the dollar could get an additional downward boost.
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.