By Takezo Trading | www.takezotrading.com
Welcome back, traders! It’s that time of the week again. Let’s break down the latest Commitment of Traders (COT) report and unpack what large speculators and commercial hedgers are signaling across the major currencies heading into the new trading week.
For anyone new to the data: the COT report — released every Friday by the Commodity Futures Trading Commission (CFTC) — gives us a window into how large speculators (typically hedge funds and institutional money) are positioned against commercials (the so-called “smart money” — producers, banks, and corporate hedgers). When positioning gets stretched to extremes, it often hints at exhaustion and a potential turning point.
There’s a lot to unpack this week, with two currencies sitting at oversold extremes and a couple of meaningful shifts in sentiment elsewhere. Let’s dive in.
CAD – Canadian Dollar 🇨🇦
- Speculators: Net short -58,834 (longs +6,640; shorts -12,798)
- Commercials: Net long +59,221
- % Long Ratio: 33.71%
Speculators remain firmly bearish on the Loonie, but the tone is shifting. Shorts were trimmed by nearly 13K contracts while longs were added — the kind of two-sided unwind that suggests the bearish conviction is starting to fade. Still net short, but the momentum is bleeding out of the trade.
CHF – Swiss Franc 🇨🇭
- Speculators: Net short -33,273 (longs -1,265; shorts -2,089)
- Commercials: Net long +42,255
- % Long Ratio: 16.74%
CHF positioning is oversold. A long ratio of just 16.74% tells you almost no one wants to be long the Franc right now — and historically, that’s exactly the kind of crowded one-way positioning that sets up reversals. Both longs and shorts came down slightly this week, but the broader picture is one of stretched bearish sentiment. Worth watching closely.
GBP – British Pound 🇬🇧
- Speculators: Net short -52,039 (longs +8,139; shorts +5,454)
- Commercials: Net long +56,839
- % Long Ratio: 35.40%
The Pound saw activity on both sides of the book — longs and shorts both grew. That’s typically a sign of disagreement in the market and rising volatility expectations. Net positioning remains bearish, but speculators aren’t running for the exits. This one feels like it’s coiling.
JPY – Japanese Yen 🇯🇵
- Speculators: Net short -94,460 (longs -728; shorts +10,524)
- Commercials: Net long +95,467
- % Long Ratio: 34.11%
The Yen continues to be the most heavily shorted major currency in the COT report. Speculators added another 10K+ shorts this week while trimming longs slightly. The carry trade dynamic remains very much alive, and bears are pressing the trade harder. That said, when net short positioning gets this extreme, the risk of a violent short-squeeze rises — something to keep in mind, especially with any policy surprise out of Japan.
EUR – Euro 🇪🇺
- Speculators: Net long +41,324 (longs +2,768; shorts -12,538)
- Commercials: Net short -83,663
- % Long Ratio: 55.25%
A clear bullish shift for the Euro this week. Speculators added longs and aggressively cut shorts (-12,538) — the kind of capitulation move that often accompanies a shift in trend bias. With the long ratio creeping above 55%, sentiment is leaning constructive. Worth noting: commercials sit heavily net short here, which is the typical hedger flip-side of a bullish speculator setup.
NZD – New Zealand Dollar 🇳🇿
- Speculators: Net short -48,454 (longs -2,195; shorts +3,983)
- Commercials: Net long +48,983
- % Long Ratio: 12.31%
NZD is oversold — and arguably the most extreme reading on the entire board. A long ratio of just 12.31% is rare territory. Speculators continue to press the short side, but at these levels, the asymmetry starts to favor the contrarian. The Kiwi has been beaten down hard, and any catalyst — a softer USD, a risk-on shift, or improving Asia data — could spark sharp short covering.
AUD – Australian Dollar 🇦🇺
- Speculators: Net long +64,817 (longs -706; shorts -448)
- Commercials: Net short -93,198
- % Long Ratio: 66.81%
The Aussie remains the most bullishly positioned major in the report, with a long ratio approaching 67%. There was minimal movement this week — both sides reduced positions slightly, suggesting consolidation rather than fresh conviction. Commercials are deeply net short, which is something to watch: when speculators get this lopsided long, the risk of a positioning reset is always lurking.
Final Thoughts
Three themes stand out from this week’s report:
1. The oversold setups: CHF and NZD. Both currencies are sitting at extreme bearish positioning, with long ratios under 17%. These are exactly the kind of stretched readings that can flip quickly when sentiment shifts. I’m not calling a top in the USD here, but I am watching these two for any sign of reversal.
2. The Euro is quietly turning. A 12K+ short cover, longs added, and net positioning building above zero — the Euro story has shifted from “selling rallies” to “watching for confirmation of a base.” Worth respecting.
3. JPY shorts keep stacking up. Bears are still in control, but at -94K net short, the trade is crowded. One catalyst is all it takes.
The Loonie deserves a footnote too — speculators trimming shorts and adding longs is the kind of subtle behavior change that often precedes the data, not the other way around.
As always, COT data is a sentiment tool, not a timing tool. Use it to frame the bigger picture, then let price action confirm your entries.
Trade safe out there.
— Takezo
Data Source: Commodity Futures Trading Commission (CFTC)
This post is for educational and informational purposes only and does not constitute financial advice. Always do your own research and trade according to your own risk tolerance.