Yen Faces Near-Term Weakness as Copper Reaches All-Time Extreme

The Japanese yen's commercial net positioning has seen a significant shift this week, signaling near-term weakness. The yen's position change of 49% is the largest weekly change in Commercial net positioning, indicating a bearish trend. However, on a longer horizon, the bullish COT extreme built earlier still supports the subsequent rise in the yen.

On the other hand, copper and soybeans have reached all-time bearish COT extremes, making them vulnerable to a reversal or period of weakness. Natural Gas remains historically stretched on the bullish side but requires patience as higher prices are plausible but timing can be slow.

COT data is best used to identify where positioning has become unusually stretched and where pressure is building. It's essential to respect the positioning, separate time horizons, and allow price to confirm when the market is ready to react.