CFTC Positioning Report: Euro bulls prevail

The latest CFTC Positioning Report for the week ending June 24 reveals a notable resurgence in risk-on trading, as market participants digested the Federal Reserve's hawkish hold; meanwhile, reduced geopolitical tensions in the Middle East and a lack of significant advancements in trade negotiations contributed to improved sentiment in the risk complex, as investors prepared for Chief Powell’s semiannual testimonies.

Speculative net longs in the Euro (EUR) have seen a marked increase, reaching levels not observed since January 2024, surpassing 111.1K contracts. Commercial players, primarily hedge funds, have raised their net short positions to around 164.3K contracts, reaching the highest level since mid-December 2023. In addition, open interest climbed to two-week highs of approximately 762.6K contracts. EUR/USD has initiated a robust recovery, successfully surpassing the 1.1600 threshold, coinciding with a gradual decline in the Greenback.

Non-commercial net shorts in the US Dollar (USD) gained momentum, reaching more than 6K contracts for the first time since March 2021, while open interest increased to roughly 31.2K contracts, the highest level in many weeks. The US Dollar Index (DXY) stayed on the back foot, dropping down below the 98.00 support and flirting with multi-year lows.

Speculators reduced their bullish bets on the British Pound (GBP), trimming their net short exposure to nearly 34.4K contracts, or five-week lows, amid an acceptable bounce in open interest. GBP/USD retested the sub-1.3400 region before regaining composure and advancing north of 1.3600 the figure.

Net longs in the Japanese Yen (JPY) held by non-commercial traders increased a tad to around 132.3K contracts, or two-week tops. Commercial players, in the meantime, reduced their bearish bets to around 147.7K contracts, the lowest level in the last couple of weeks, all against the backdrop of another drop in open interest, this time to nearly 314.8K contracts. Further upside momentum lifted USD/JPY to multi-week peaks around 148.00, only to give up the majority of those gains later.

Despite receding to two-week lows near 195K contracts, speculative net longs in Gold remained in the area of multi-week highs amid a modest retracement in open interest. Prices of the yellow metal extended their breach below the key $3,400 mark per troy ounce, threatening to challenge the upcoming contention zone around $3,300.

Non-commercial net longs in WTI increased to levels not observed since late January, reaching nearly 233K contracts. This coincided with a rise in open interest, which approached 1.962M contracts, marking a two-week high. The prices of the American reference WTI reached new highs beyond the $77.00 mark per barrel, only to subsequently decline sharply, losing approximately 12% following the Israel-Iran ceasefire.