EUR/USD, USD/JPY, VIX, Gold, Crude oil: COT Report Analysis

There was little change in weekly exposure among most FX majors last week, with net positioning shifting by 6k contracts or less. The exception was the Japanese yen (JPY), where a mix of short covering and new long positions saw net-long exposure rise by 18.4k contracts.

Net-short exposure to Canadian dollar (CAD) futures was trimmed by just 50 contracts, while net-shorts on the British pound (GBP) rose by 465 contracts. Bulls added 6k contracts to net-long exposure in euro (EUR) futures, while large speculators reduced net-short exposure to Australian dollar (AUD) futures by 3.5k contracts.

Gold attracted further buying interest, with both large speculators and asset managers increasing net-long exposure, though positioning remains well below extreme levels. Appetite for risk also held firm, with net-long exposure to VIX futures falling by 18.4k contracts. Asset managers are now close to flipping net-short, holding only 21 contracts on the long side. Crude oil traders cut longs by 18.8k contracts (-6.4%).

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Chart analysis by Matt Simpson - data source: LSEG, CME

Weekly COT Report Highlights:

US Dollar (USD): Net-short exposure rose $2.5 billion to -$8.7 billion last week
European dollar (EUR): Asset managers increased net-long exposure for a fifth week, by 3.4k contracts to 38.2k contracts (highest since December 2023)
Japanese yen (JPY): Net-long exposure increased by 18.4k contracts among large speculators
Australian dollar (AUD):
Canadian dollar (CAD): Net-short exposure remained effectively flat at around -10.9k contracts 59 overo-week
Swiss franc (CHF): Net-short exposure increased to a 20-week high
New Zealand dollar (NZD):
Gold (GC): Net-long exposure rose to a 6-month high among large specs
Crude Oil (WTI): Managed funds are on the cusp of flipping ot net-short exposure for the first time since 2008

EUR/USD Positioning: Euro Futures – Weekly COT Report Analysis

Like the Japanese yen, the euro remains locked in a frustrating sideways trade. However, the broader uptrend continues to favour an eventual bullish breakout, supported by positioning in the EUR/USD futures market.

Managed funds increased their net-long exposure to euro futures to the most bullish level since December 2023. This also marked the fifth consecutive week of rising net and gross-long exposure, alongside a fifth week of reduced shorts.

The positioning bias is clearly bullish, though prices need to confirm soon. Otherwise, there is a risk that longs could be unwound, triggering a move lower against current sentiment.

EUR/USD weekly futures positioning chart showing euro price consolidation near $1.17, with asset managers holding their most bullish net-long exposure since December 2023, supported by rising longs and falling shorts.

Chart analysis by Matt Simpson - data source: LSEG, CME

Volatility Index Positioning (VIX): Weekly COT Report Analysis

I am beginning to wonder if sentiment is in need a bit of a shakeup, given Wall Street indices continue to push to new highs while the volatility index (VIX) remains low. Positioning data on the VIX futures market may also point towards a level of complacency, which tends to appear before any shakeup.

Managed funds were net-long by a mere 2.8k contracts, their least bullish level since late February. Large speculators pushed their net-short exposure to their most bearish level since March 2021. Total open interest (proxy for volume) has also risen to its highest level since March 2024, and second highest since 2019.

Now that it not to say that any spike on unpleasant volatility is imminent. But it is something to consider, and for traders to be on guard for at least a minor quibble, while Wall Street indices keep reaching new highs.

Chart analysis by Matt Simpson - data source: LSEG, CME

JPY/USD Positioning: Japanese Yen Futures – Weekly COT Report Analysis

The trading range for USD/JPY has remained frustratingly narrow in recent weeks, not helped by renewed confidence of Fed cuts alongside hopes of BOJ hikes being pushed back. But futures traders appear to be betting on a stronger Japanese yen (or bearish USD/JPY) looking at the recent COT report.

Large speculators increased their gross-long exposure by 87.4k contracts (25%) – their fastest weekly increase in five months. While net-long exposure is up to a seven-week high, gross-long exposure has reached a 13-week high and risen for five consecutive weeks. Gross-shorts were also reduced by -12.4k contracts (-12.3%). Asset managers also increased their gross-long exposure by 11.8k contracts (8.2%) to suggest bullish pressure is building on the Japanese yen, which could eventually see USD/JPY break lower.

Traders should keep an eye on this week’s Bank of Japan (BOJ) meeting for clues. While they seem unlikely to hike, we could find comments over the coming weeks are supportive of such action in futures, which could be the catalyst for the yen to break its range.

Chart analysis by Matt Simpson - data source: LSEG, CME

Gold Futures Positioning (GC): Weekly COT Report Analysis

Gold extended its rally for a fourth straight week, with spot prices holding at record highs for a second week in a row. What makes this advance notable is that positioning has yet to catch up — net-long exposure among futures traders remains relatively modest compared to the scale of gold’s breakout.

Large speculators lifted their net-long exposure to a six-month high, while managed funds increased theirs to a five-month high. Neither group is at a positioning extreme, but both show a clear trend of rising longs and suppressed shorts.

With sentiment still far from overstretched, gold continues to look attractive to dip buyers. Talk of a potential run towards the $4,000 level no longer feels outlandish as bullish momentum and positioning align.

Chart analysis by Matt Simpson - data source: LSEG, CME

WTI Crude Oil Positioning (CL): Weekly COT Report Analysis

Managed funds are turning increasingly bearish on WTI crude oil, with net-long exposure falling to just 10k contracts — the lowest since 2009. This places them on the cusp of flipping to net-short for the first time since 2008.

Rising OPEC+ production and expectations of inventory builds into late 2025, highlighted in the latest EIA outlook, are pressuring sentiment. Adding to the bearish bias, slowing US economic activity raises concerns for global oil demand. Although WTI crude remains above its September low, futures positioning suggests traders are preparing for a potential downside break.

Chart analysis by Matt Simpson - data source: LSEG, CME

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-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

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