CFTC Data Reveals Shift Towards Defensive Currency Positioning

The Commodity Futures Trading Commission (CFTC) released data showing that currency traders shifted towards defensive positioning in the week ending September 22. Sterling and euro shorts increased, while yen longs were reduced.

In yen, speculative exposure decreased to nearly 72K contracts as USD/JPY revisited the 157.40 area. The exposure sat near the 85th percentile, and net positioning was near the 88th percentile.

The euro saw non-commercial net shorts almost double to just over 52.3K contracts, with EUR/USD sliding to the mid-1.1400s. Gold remained the most crowded trade at the 95th percentile, while GBP was at the other extreme near the 1st for exposure and near the 2nd on net positioning.

The CFTC data suggests that derivative traders should tread carefully in the coming weeks as defensive currency positioning takes hold. The Japanese Yen and Canadian Dollar show strong alignment between price action and speculative flows, implying continued tactical momentum.