CFTC Report: FX repositioning dominates as commodities diverge

Pablo Piovano FXStreet

The week in one sentence: speculators’ positioning turned more selective in the week to August 11. That said, Gold attracted the strongest inflow, while WTI and VIX recorded the largest reductions. Across the FX galaxy, CAD short covering continued, but EUR and AUD positioning weakened despite firmer spot prices.

Gold: Buying broadens with price confirmation

Net Gold length increased by around 20.3K contracts, the strongest weekly rise since early June. Gross longs rose by nearly 24K contracts, while gross shorts also edged up by just over 3.6K contracts. Gold prices advanced markedly over the reporting week, reinforcing the bullish signal. Net longs reached almost 218K contracts, and speculative exposure climbed to the 95^th percentile of its 5-year range

WTI: Price rally masks further selling

Non-commercial net longs in the West Texas Intermediate (WTI) fell by around 13.2K contracts, leaving the net position near the 8th percentile. The decline was driven by a roughly 19.2K-contract increase in gross shorts, more than offsetting just over a 6K increase in gross longs. This contrasted sharply with the nearly 10% rise in WTI prices, creating the week's clearest positioning-price divergence.

VIX and Coffee: Opposite signals

VIX speculative positioning deteriorated by around 13.8K contracts, the largest weekly decline since June 2. The VIX index showed a strong retracement, so price and positioning moved together. Coffee (KC1) moved in the opposite direction: net longs went up by around 2.3K contracts, and prices posted a decent uptick, offering modest bullish confirmation.

CAD covering stands out

Net shorts in the Canadian Dollar (CAD) narrowed by just over 5.7K contracts, largely through short covering, as USD/CAD dropped modestly. British Pound (GBP) net shorts also eased, but both long and short positions increased. Euro (EUR) positioning deteriorated by almost 2K contracts, while Australian Dollar (AUD) net shorts widened by more than 6K contracts despite modest gains in both currencies against the Greenback.

JPY: The historic unwind slows

Speculators reduced their net shorts in the Japanese Yen (JPY) by roughly 3.4K contracts after the previous week's historic 117.9K-contract improvement. The move, again, reflected a reduction in gross exposure, with both longs and shorts falling. However, USD/JPY clinched decent gains, meaning the Yen weakened as speculative shorts were cut, a reversal from the prior week's price confirmation.

Positioning Map: Extremes remain pronounced

Gold is the clearest, crowded long, with exposure at the 95^th percentile. AUD exposure remains elevated despite the weekly deterioration, while USD positioning is still relatively firm. At the other end, EUR net positioning sits near the 4^th percentile and WTI near the 8^th, leaving both vulnerable to sharp covering if prices continue to rise.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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