CFTC Report: Oil rebound offsets broader positioning retreat

Pablo Piovano FXStreet

The week in one sentence: Speculative positioning became more defensive in the week ending September 1. Yen short positioning recorded the largest deterioration, while Gold length also retreated. Oil buying returned alongside stronger prices, and Canadian Dollar and Euro positioning improved, although Euro flows diverged from weaker spot prices.

CAD: Short coverings resumes

Canadian Dollar (CAD) net shorts narrowed by around 13.4K contracts to 108.1K, the strongest weekly improvement since August 25. Gross long positions were broadly unchanged, while gross shorts fell by 13.4K. USD/CAD rose modestly, suggesting a modestly weaker CAD despite the positioning improvement. In addition, net positioning rose to the 25^th percentile.

GOLD: Length retreats

Gold net longs fell by around 15.2K contracts to 228.1K, the largest weekly decline since early February. Spot prices fell markedly over the reporting week, with exposure easing to the 96^th percentile.

WTI: Buying returns with prices

Non-commercial net longs in WTI increased by around 6.5K contracts to 129.9K, while the barrel gained nearly 10% over the reporting period. Price and positioning therefore moved together, although net positioning remains near the 15^th percentile.

JPY: Shorts build sharply

Speculative net shorts in the Japanese Yen (JPY) widened by around 28.9K contracts to 92.2K, or multi-week lows. USD/JPY traded with decent gains, confirming Yen weakness as positioning deteriorated. Further data saw the net positioning slipping to the 30^th percentile.

EUR and AUD: Flows diverge from prices

Euro net shorts narrowed by around 11.4K contracts, but EUR/USD traded with decent losses, creating a positioning-price divergence. Speculators reduced their net short in the Australian Dollar (AUD) by around 5K, while AUD/USD posted a modest decline, marking another modest divergence. Additionally, Coffee (KC1) net longs fell by around 6.5K alongside a strong price decline.

Positioning Map: Gold remains elevated

Gold exposure remains near the 96^th percentile despite this week’s reduction in net longs. The AUD’s exposure is also elevated near the 82^nd percentile. At the other end, VIX net positioning sits near the 11^th percentile and WTI near the 15^th, while CAD improved to the 25^th percentile.

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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