The latest CFTC Commitment of Traders (COT) report highlights growing divergences across major FX futures. While price action in several markets remains resilient, positioning suggests traders may be late to the move, raising the risk of reversals or forced position adjustments in the weeks ahead.
View related analysis:
- USD/JPY Outlook: Yen Bears Push Toward 160 as Intervention Risks Rise
- Australian Dollar Outlook: AUD/USD Stuck as Geopolitics and US Data Loom
- FX Futures Positioning: EUR/USD, USD/CHF, USD/CAD, USD/JPY | COT Report
- AUD/USD 2026 Outlook: Policy Divergence and a Shifting Dollar Trend
Large Speculator Positioning from the COT report
Large speculator positioning shows growing divergence across major FX futures. USD sentiment is stabilising, JPY has flipped to bearish exposure among large speculators, and AUD positioning looks crowded despite its recent bounce. Several markets are flashing late-cycle or sentiment-extreme signals rather than fresh trend conviction.
Source: CFTC (COT), LSEG
US Dollar Index (DXY)
Asset managers flipped back to net-long exposure for the first time in three weeks, with gross longs rising by 2.6k contracts — the fastest increase in 10 weeks. Shorts were trimmed by just 243 contracts, while large speculators remained net-short for a 31st consecutive week, effectively unchanged at -3.2k contracts.
Euro (EUR)
Large speculators turned more cautious on the euro, with net exposure falling by 30.2k contracts on the week — the sharpest decline since November 2024. Gross longs were cut aggressively, while gross shorts rose, signalling fading speculative conviction despite elevated prices.
Source: CFTC (COT), LSEG
Japanese yen (JPY)
Large speculators flipped to net-short exposure on the yen for the first time in 12 months. That this occurred just one week ahead of the Bank of Japan policy meeting highlights a lack of conviction in any near-term hawkish shift. The move has pushed percent ranks to 0% across both 3-month and 1-year horizons, flagging a sentiment extreme.
Swiss franc (CHF)
Net-short exposure among asset managers has reached a record high, pushing percent ranks to 0% across all three time horizons and warning of a bearish sentiment extreme.
Canadian dollar (CAD)
Large speculators remain net-short CAD, with positioning effectively flat on the week. However, gross longs rose to their highest level since July 2021. The 1- and 3-year percent ranks sit near range highs, with the 3-month close behind — another warning of stretched sentiment. Asset managers remain marginally net-long, though conviction remains muted.
New Zealand Dollar (NZD)
Sentiment appears to be turning in favour of the New Zealand dollar. The 3-month percent rank has rebounded from its lows, with the 1-year measure lagging behind. While the 3-year rank remains near range lows, positioning may be primed to mean-revert higher as the RBNZ signals an end to its easing cycle and domestic data continues to firm.
Australian Dollar (AUD):
By contrast, AUD positioning hints at a potential cycle high, with both 1-year and 3-month percent ranks at 100%. Large speculators and asset managers remain net-short, although asset managers increased gross long exposure and AUD/USD has already bounced sharply from its cycle lows. With geopolitical risks tied to Trump rhetoric and renewed headlines around Iran and Greenland, the setup argues for consolidation or a pullback rather than fresh upside.
FX Futures Positioning | COT Report (IMM Data)
USD/JPY Futures Positioning | COT Report
It is somewhat ironic that large speculators have only just flipped to net-short yen futures, as price action alone already points to a sentiment extreme. The yen has fallen around 12.5% since April, pushing USD/JPY to within touching distance of the 160 handle.
With intervention risk rising and geopolitical tensions building, the balance of risks increasingly favours a corrective move in the yen, which would weigh on USD/JPY. Japan’s inflation has now held above target for four years, leaving Bank of Japan Governor Ueda with limited scope to maintain a consistently dovish stance.
Ultimately, the shift to net-short positioning among large speculators looks more like a late signal than a reason to chase yen weakness. If President Trump were to succeed in removing Powell sooner than expected, USD downside risks could intensify — making short USD/JPY a plausible outcome over the weeks or months ahead.
Source: CFTC (COT), LSEG
EUR/USD Futures Positioning | COT Report
Asset managers remain comfortable with their bullish euro positioning, pushing gross longs to an all-time high and net-long exposure to a 2.5-year high.
Large speculators, however, appear less convinced, reducing net-long exposure at the fastest weekly pace since November, down 30.2k contracts. Gross longs were cut by 14.6k contracts, while gross shorts rose by 15.5k — a clear divergence between institutional conviction and speculative positioning.
Source: CFTC (COT), LSEG
USD/CHF Futures Positioning | COT Report
The relationship between Swiss franc price action and underlying futures positioning appears to have broken down since June. Large speculators remain heavily net-short CHF, even as the currency continues to hold firm against the US dollar. Net shorts sit near 43.4k contracts — close to an 18-month high — while asset managers are the most bearish on record.
Prices will either need to roll over to justify that bearish exposure, or bears may be forced to cover, potentially sending the Swiss franc higher still. If positioning is leaning on Swiss National Bank intervention, it has yet to deliver.
Early signs suggest large speculators are increasing net-long CHF exposure at a faster pace, though the concurrent rise in short positions implies hedging rather than a shift in outright conviction.
Source: CFTC (COT), LSEG
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-- Written by Matt Simpson
Follow Matt on Twitter @cLeverEdge
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