CFTC data for the week to 6 October showed deeper bearish positioning in the euro and Australian dollar, while Japanese yen longs rebuilt. Euro net exposure moved to around 99.3K contracts and EUR/USD drifted back towards 1.1260, leaving exposure near the 1st percentile and net positioning near the 0th. Coffee buying continued and gold exposure stayed elevated even as the metal fell again.
In the Australian dollar, non-commercial positioning shifted further negative, with net longs near 98.6K contracts, the highest since late August 2025, as spot slipped below 0.7000; exposure sat near the 47th percentile and net positioning near the 2nd. Price and speculative flow diverged in JPY, GBP and WTI, while they aligned in CAD, EUR and CHF. Gold remained the most crowded trade, with exposure at the 88th percentile, and GBP was near the 0th percentile; JPY also showed a strong net-positioning reading at the 86th percentile, contrasting with EUR near the 0th net percentile.
Euro and Australian Dollar Positioning Tactics
We should lean into short Euro positions in the coming weeks as both price action and heavy net-short positioning align. With Euro net shorts swelling to nearly 99.3K contracts and EUR/USD slipping toward 1.1260, tactical momentum clearly favors the downside. Because net positioning sits near its absolute historical bottom percentile, we must keep stop-losses tight to guard against violent short-covering bounces.
For the Australian Dollar, we recommend waiting for sustained trading below the 0.7000 mark before expanding short positions. Bearish bets have climbed to roughly 98.6K contracts, marking the heaviest short build in the currency since late 2025. Historical market cycles demonstrate that when short positioning hits the 2nd percentile without fresh fundamental catalysts, downward moves often exhaust themselves quickly.
Approach to Yen, Pound, WTI, and Gold
We need to hold off on strong trend bets in the Japanese Yen, British Pound, and WTI crude due to a clear mismatch between prices and positioning. When speculative flows push one way while spot prices move the other, directional signals become unreliable. We advise letting price action lead the way in these assets, taking positions only when price movements begin to validate the underlying money flows.
Gold stands out as the most crowded trade on our radar, holding at the 88th percentile of exposure despite its recent price pullbacks. Meanwhile, the British Pound sits at the opposite extreme near the 0th percentile, leaving it unusually under-owned. We should reduce long exposure in Gold to avoid sharp unwinding risks and scan GBP for bullish reversal setups if price action turns supportive.
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