The latest Commitment of Traders (COT) report highlights key shifts across AUD/USD, USD/JPY, and gold futures. Speculators trimmed bearish exposure to the Australian dollar at the fastest pace in more than four years, suggesting sentiment may be turning. Positioning in the Japanese yen remains divided, with both gross-longs and gross-shorts increasing as traders balance Fed rate cut bets with political uncertainty in Japan. Meanwhile, gold futures saw strong inflows, with large speculators and managed funds boosting net-long exposure alongside a technical breakout, reinforcing the bullish case for precious metals.
View related analysis:
- AUD/USD Weekly Outlook: Australian Dollar Bulls Eye Breakout of 66c
- Japanese Yen Rebound, USD Weakness, Commodity FX Diverge: COT Report
- Japanese Yen Outlook: USD/JPY, GBP/JPY, EUR/JPY Price Action Setups
- AUD/JPY Outlook: First 10-Day Rally in 10 Years Faces Resistance
Charts prepared by Matt Simpson - data source: CME, LSEG
Weekly COT Report Highlights: AUD/USD Shorts Ease, JPY Futures Mixed, Gold Bulls Advance
- US Dollar (USD): Net-short exposure fell -0.5 billion to -$5.6 billion last week
- European dollar (EUR): Asset managers were their most bullish since January 2024
- British pound (GBP): Asset managers and large speculators increased their net-short exposure for a second week
- Japanese yen (JPY): Gross-shorts among large specs reached a 7-month high
- Australian dollar (AUD): Large specs reduced gross-shorts at their fastest pace in 4.5 years
- Canadian dollar (CAD): Net-short exposure rose by 4k contracts
- New Zealand dollar (NZD): Gross-shorts rose for a sixth week among both sets of traders
- Gold (GC): Net-long exposure rose by 54.8k contracts between managed funds and large specs
AUD/USD Positioning: Australian Dollar Futures – Weekly COT Report Analysis
There was a notable round of short covering in AUD/USD futures last week, as markets increasingly acknowledge that the Reserve Bank of Australia (RBA) is unlikely to cut its cash rate any time soon. Both inflation and growth have surprised to the upside, while surveys show improving confidence among consumers and businesses. Household spending and the labour market also remain resilient.
Large speculators reduced their gross-short exposure at the fastest pace in 4.5 years, while asset managers cut theirs at the quickest pace in two years. Positioning remains heavily net-short on the Australian dollar, but with back-to-back Fed cuts now being priced in, I expect further reductions in short exposure in the weeks ahead.
Chart prepared by Matt Simpson - data source: CME, LSEG
JPY/USD Positioning: Japanese Yen Futures – Weekly COT Report Analysis
In recent weeks I have outlined my case for yen bulls to regain traction, though the resignation of Japan’s PM weakens the case for BOJ hikes. SO whiled the US dollar could weaken on Fed-cut bets, the potential bearishness of USD/JPY may be limited if BOJ hikes really are off the table. Furthermore, if US data continues to deteriorate, the US dollar could gain a safe-haven bid which could work in the favour of USD/JPY bulls.
This means that we may need to take the rise of long bets in favour of the Japanese yen may need to be taken with a pinch of salt. And perhaps more attention should be paid to the rise of gross-shorts to the yen among large speculators.
Chart prepared by Matt Simpson - data source: CME, LSEG
Gold Futures Positioning (GC): Weekly COT Report Analysis
Gold bulls enjoyed a convincing breakout last week from a triangle continuation pattern. Traders were already positioning ahead of the move, with the latest COT data showing large speculators increasing net-long exposure by +35.2k contracts and managed funds by +19.6k contracts. Since positioning is not yet at a sentiment extreme, the setup still favours dip buyers, suggesting gold bulls are likely to continue seeking opportunities on pullbacks.
Chart prepared by Matt Simpson - data source: 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
