CFTC Positioning Report: Bearish bets on the USD picked up pace

Commodity Futures Trading Commission (CFTC) data for the week ending August 26 suggest the FX galaxy is still swinging unpredictably. Traders are closely monitoring the ongoing debate about the Fed's independence, the absence of new headlines about trade tensions, and the increasing speculation that the Fed might implement two rate cuts before the year ends, despite the fact that US inflation remains above target.

Speculators increased their US Dollar (USD) net shorts to around 6.1K contracts, or two-week highs, while open interest climbed to four-week peaks of nearly 31.5K contracts. The US Dollar Index (DXY) traded in an erratic mood, with the topside capped by the provisional 100-day SMA near 98.80, and the mid-97.00s holding the downside, for now.

Speculative net longs in the Euro (EUR) climbed further, hitting four-week highs just over 123K contracts. At the same time, non-commercial traders added to their bearish exposure, taking their shorts to an also multi-week top near 173.2K contracts. Additionally, open interest rose for a third week in a row to around 842.2K contracts. Mirroring its peers, EUR/USD kept the vacillating trade, roughly between 1.1600 and 1.1750.

Non-commercial players increased their Japanese Yen (JPY) net longs to nearly 84.5K contracts, the highest in the past four weeks. Furthermore, institutional net shorts climbed to around 90.1K contracts, levels last seen in late July. Following the same trajectory, open interest increased to almost 357.4K contracts, a level last seen in early June. The USD/JPY remained unchanged, maintaining its multi-week consolidative phase between 146.00 and 149.00.

Speculators added to their net shorts on the British Pound (GBP), taking them to two-week highs around 31.3K contracts. Open interest rose for the third week in a row, this time approaching the 220K contracts for the first time since early June. GBP/USD bounced off troughs near 1.3400, retargeting the 1.3500 barrier and beyond.

Speculative traders remained bearish on the Australian Dollar (AUD), with net shorts climbing to levels last seen in April 2024 around 100.6K contracts and open interest rising for the fourth consecutive week to nearly 191.2K contracts. AUD/USD managed to stage a marked rebound after hitting lows near the 0.6400 neighbourhood.

Non-commercial net longs in Gold regained traction, rising to two-week highs around 214.3K contracts amid an acceptable rebound in open interest, this time to around 443.8K contracts. Gold prices regained solid upside impulse, putting the $3,400 mark per troy ounce to the test after several weeks.