FX Futures Positioning: US Dollar, EUR, JPY, CAD | COT report

US dollar positioning has eased for a second consecutive week after reaching a bullish extreme two weeks ago. At the same time, bullish bets are building across parts of FX—particularly EUR, GBP and CAD—while yen shorts continue to rise. The key question now is not whether positioning is stretched against the dollar, but whether the USD can continue to drift lower from its recent peak.

View related analysis:

COT Report: USD Eases from Bullish Extreme as Traders Assess Next Move

Large Speculator Positioning from the COT report

Source: CFTC (COT), LSEG

US Dollar: Net-long exposure fell for a second week (-$3.1 billion) to $10.8 billion, asset managers trimmed net-long exposure to the USD index by -1.5k contracts

EUR/USD: A -12.3k decline (-7.5%) of gross-short euro exposure saw net-long exposure rise 16k contracts (or 31.2k including asset managers)

GBP/USD: Net-long exposure rose 9.4k contracts among both sets of traders

USD/JPY: Net-short exposure to Japanese yen futures rose by a combined 15.5k contracts among large specs and asset managers

USD/CHF: Asset managers trimmed net-short exposure to Swiss franc futures by -4.1k contracts

USD/CAD: Gross-long exposure increased rose 44.1k among both sets of traders, with a clear trend of rising longs and diminishing shorts

AUD/USD: Minimal changes on the Australian dollar positioning show traders not ready to give up their bullish views heading into CPI week

NZD/USD: Net-short exposure continued to rise despite the recent surge of New Zealand dollar futures pricing

Asset Manager Positioning | COT Report

Source: CFTC (COT), LSEG

FX Futures Positioning | COT Report (IMM Data)

US Dollar Index (DXY) Futures Positioning | COT Report

Bulls continued to loosen their grip on the US dollar across several metrics. Aggregate USD positioning via the futures market fell for a second consecutive week to $10.8 billion, declining by roughly $3 billion per week. This has been accompanied by a reduction in net-long exposure to the US dollar index among asset managers.

While bullish exposure was only trimmed by -1.5k contracts last week, this came alongside a third consecutive weekly increase in gross shorts and a second week of declining longs. Asset managers had already reduced net-long exposure by -5.2k contracts the week prior.

This reinforces my view that the US dollar index likely formed an important top on March 31, with bears increasingly looking to fade rallies on expectations of a move toward new cycle lows later this year.

Source: CFTC (COT), ICE, LSEG

EUR/USD Futures Positioning | COT Report

Futures traders increased their net-long exposure for a second week, after large speculators flipped to net-long exposure two weeks ago. Positioning is therefore far from any sort of sentiment extreme. Large specs are now net-long by 41.3k contracts, mostly fuelled by a reduction of euro shorts bets alongside a gradual rise of longs. If bullish bets beginning to build, it brings forward the chance of a break lower on the US dollar index.

Source: CFTC (COT), CME, LSEG

USD/JPY Futures Positioning | COT Report

Futures traders increased net-short exposure by a combined 15.5k contracts last week, with 11.3k driven by large speculators. A rise in gross shorts accounted for most of the move.

Zooming out, the Japanese yen chart shows a clear trend of rising gross shorts—particularly among large specs. Longs have plateaued among asset managers and edged higher for large specs in recent weeks, but the broader trend in net-short exposure remains firmly intact.

What stands out is that yen futures prices continue to trade in a tight sideways range, refusing to break lower. The longer the yen resists weakening in line with rising short bets, the greater the risk of a squeeze higher—potentially sending USD/JPY lower. Given the broader case for a softer US dollar, this is a scenario worth monitoring.

Source: CFTC (COT), CME, LSEG

USD/CAD Futures Positioning | COT Report

The Canadian dollar has risen for a third consecutive week against the US dollar, although most of the gains were made in week two. Asset managers are now on the verge of flipping back to net-long exposure, with a combined increase of over 40k net-long contracts across large specs and asset managers.

Longs picked up among asset managers, rising by 12.6k contracts (+18.5%) last week, while shorts were trimmed by -12.1k (-12.8%). With net exposure still well below sentiment extremes for both groups, there may be scope for further downside in USD/CAD.

Source: CFTC (COT), CME, LSEG

View the full economic calendar

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

How to trade with City Index

You can trade with City Index by following these four easy steps:

Open an account, or log in if you’re already a customer

• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
Search for the market you want to trade in our award-winning platform
Choose your position and size, and your stop and limit levels
Place the trade

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

Delayed London Stock Exchange (LSE) Data

The London Stock Exchange (LSE) market data displayed or referenced on this website is provided on a delayed basis and is not in real time. The delay period may vary but is typically at least 15 minutes. This data is intended for information purposes only and should not be relied upon for trading, investment, or other financial decisions. We do not guarantee the completeness, reliability, or suitability of the data for any particular purpose. Users should consult real-time data sources and obtain professional advice before making any financial decisions.