Constructive Shifts in Market Positioning as CAD and EUR Shorts Improve

The week's market positioning has shifted towards more constructive speculative trends, with several key assets seeing significant changes. The Canadian Dollar (CAD) saw a notable improvement in its non-commercial net shorts, shrinking by over 36.5K contracts to about 121.5K contracts, marking the biggest weekly improvement since mid-December. This shift led to modest CAD gains and respectable losses for USD/CAD.

The Euro (EUR) also experienced a significant reduction in speculative net shorts, shrinking by around 22.7K contracts to more than 36.3K contracts, the strongest weekly improvement since mid-April. As a result, EUR/USD advanced markedly, surpassing the 1.1700 barrier for the first time since early May.

However, not all assets saw positive positioning shifts. The Japanese Yen (JPY) saw speculators add nearly 10.4K contracts to their net short positioning, despite its price gathering pace and prompting USD/JPY to trade with modest losses. In contrast, the British Pound (GBP) improved by just over 10K contracts, while GBP/USD picked up strong upside traction well north of 1.3600.

Gold saw a significant surge in buying, with net longs increasing by more than 21.1K contracts to just over 243.3K contracts, the biggest weekly rise since June 2. This has lifted exposure to the 99th percentile of its five-year range, making it the clearest crowded long in the report.