FX Futures Positioning: US Dollar, EUR, GBP, JPY | COT Report

The latest Commitment of Traders (COT) report showed speculative appetite for the US dollar continuing to build, with net-long exposure reaching its highest level in 17 months. At the same time, bearish positioning intensified across several major currencies, although the euro, pound and New Zealand dollar are beginning to show signs of sentiment reaching increasingly stretched levels. Here are the key positioning shifts from the latest IMM futures data.

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Latest FX futures positioning from the COT report

Large Speculator Positioning from the COT report

Source: CFTC (COT), LSEG

For traders wanting a deeper understanding of futures positioning, I’ve also published a guide on how to read and interpret weekly COT data in forex markets.

US Dollar: Net-long exposure rose $4.9 billion to a 17-month high of $33.5 billion.
EUR/USD: Only minor adjustments saw large speculators trim net-longs by 1.1k contracts last week, while gross shorts climbed to an 18-month high.
GBP/USD: Asset managers' net-short exposure reached a record high of -156.3k contracts.
USD/JPY: Large speculators lifted net-short yen exposure to a near two-year high of 155k contracts.
USD/CHF: Combined positioning remained net-short the Swiss franc by 80.2k contracts, with only minor weekly changes.
USD/CAD: Large speculators increased net-short Canadian dollar exposure to a 30-week high of 150.1k contracts.
AUD/USD: Net-short exposure rose for a second consecutive week to a 24-week high of 18.3k contracts.
NZD/USD: Large speculators increased net-short exposure to a record high of 63.3k contracts.

Asset Manager Positioning | COT Report

Source: CFTC (COT), LSEG

FX Futures Positioning | COT Report (IMM Data)

US Dollar Index (DXY) Futures Positioning | COT Report

Traders have added $30 billion of bullish exposure to the US dollar via futures over the past six weeks, taking net-long to $33.5 billion – its highest level since January 2025. It could be considered a sentiment extreme compared to peak of bullish exposure over the past seven years, though bullish exposure has reached over $50 in the past.

There are early signs that longs are questioning things on the US dollar index, with large specs trimming -1.7k long contracts last week – though shorts were flat. That said, asset managers increased their gross-longs to an 18-month high of 22.2k contracts, which could be considered a potential sentiment extreme.

Source: CFTC (COT), CME, LSEG

EUR/USD Futures Positioning | COT Report

Large speculators were on the cusp of flipping to net-short exposure for the first time in 12 weeks, with net-long exposure of just 1.1k contracts. Gross shorts rose to an 18-month high of 234k contracts, while gross longs were also trimmed. With asset managers' gross shorts reaching a record high, I am now questioning whether bearish bets on the euro are approaching a sentiment extreme. If so, it could strengthen the case for a swing high in the US dollar index. It's still early days, of course, but it's something to keep in the back of our minds rather than simply chasing the 'hawkish Fed' narrative that has dominated for a while now.

Source: CFTC (COT), CME, LSEG

USD/JPY Futures Positioning | COT Report

Volatility has picked up for USD/JPY since it broke above 162, and it has cut both ways. While there has been speculation of intervention from Japan's Ministry of Finance (MOF), I suspect market forces have simply been doing the work for them. USD/JPY began its selloff ahead of Friday's softer-than-expected NFP report, and because it unfolded over several hours, it lacked the usual hallmark of the sharp, sudden plunge seen during previous interventions.

Nor can we say the move came without warning. I have been ringing the alarm for several weeks in this COT report, highlighting the record level of short bets against the Japanese yen. Given USD/JPY has risen around 5% since its most recent intervention on 6 May, we could continue to see two-way volatility driven by natural market forces as traders weigh the potential for a breakout against growing calls for yen intervention. But if history is anything to go by, the MOF may simply be waiting for sufficiently weak US data to justify a well-timed intervention.

Source: CFTC (COT), CME, LSEG

GBP/USD Futures Positioning | COT Report

There was a slight divergence in sentiment towards the British pound last week, with net-short exposure reaching a record high among asset managers while large speculators trimmed theirs by 3.5k contracts. The fact that gross-long exposure also reached a record high alongside record net-short exposure among asset managers hints at a sentiment extreme. Meanwhile, large speculators trimming gross shorts from a seven-year high suggests they're already becoming cognizant of the potential for a reversal. That said, GBP/USD is now trading at a four-week high after printing a bullish engulfing candle last week, which also completed a three-bar bullish reversal (morning star) pattern.

Source: CFTC (COT), CME, LSEG

Commodity FX Futures Positioning (AUD, CAD, NZD) | COT Report

The general theme in recent weeks has been to short commodity FX. While AUD/USD and NZD/USD are retracing higher, the Canadian dollar remains the odd one out, continuing to succumb to US dollar strength. Still, futures positioning remains firmly tilted to the bearish side for all three.

AUD/USD: Large speculators increased their net-short exposure to Australian dollar futures for a second consecutive week, just three weeks after flipping to net-short. While asset managers flipped to net-short two weeks earlier, neither group is anywhere near a sentiment extreme. So while prices are bouncing for now, positioning is neither screaming 'buy' nor signalling a bearish sentiment extreme.

NZD/USD: The same cannot be said for the New Zealand dollar, with net-short exposure reaching a record high among large speculators and a six-month high among asset managers. That could hint at a sentiment extreme for the Kiwi dollar.

USD/CAD: The loonie has continued to defy bears as the Canadian dollar succumbs to broad US dollar strength. Yet gross and net-short exposure among large speculators may be approaching a sentiment extreme, while asset managers appear to be losing their appetite to short the loonie. Their net-short exposure has effectively remained flat over the past two weeks, with 81.2k net-short contracts compared with 150.8k among large speculators.

Source: CFTC (COT), CME, LSEG

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-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

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