British Pound Future COT report As Of 9th Sept 2025

 

Executive Summary

The COT report reveals a market with a significant net short bias held by Asset Managers, which is being counterbalanced by net long positions from Leveraged Funds and Dealer/Intermediaries. The extremely high "Spread" positions, particularly from Leveraged Funds, indicate a market dominated by complex, multi-leg strategies rather than outright directional bets. This often leads to a state of equilibrium but can also be a precursor to increased volatility when these positions unwind.

---

1. Key Overall Metrics

• Open Interest (322,879): This is the total number of open contracts. It's a high figure, indicating strong liquidity and significant interest in GBP futures.

• Total Traders (110): A manageable number of reporting entities, suggesting that positions might be concentrated among a few key players.

---

2. Analysis by Trader Group

a) Dealer/Intermediaries

• Position: Net Long. (Long: 76,502 | Short: 25,168 | Spread: 77,236)

• Interpretation: Dealers are typically on the other side of their clients' trades. Their substantial net long position suggests that, in aggregate, their clients (like Asset Managers and Leveraged Funds) have been selling/shorting the British Pound. Dealers accumulate long positions to provide liquidity for these client sales. The massive spread position further underscores their role in facilitating complex trades and managing risk.

b) Asset Managers/Institutional

• Position: Overwhelmingly Net Short. (Long: 39,774 | Short: 110,081)

• Interpretation: This is the most decisive group. Institutional investors (e.g., pension funds, insurance companies) hold a very large net short position. This typically reflects a bearish fundamental outlook on the British Pound. They may be hedging against UK asset depreciation or speculating on GBP weakness due to factors like economic data, interest rate expectations, or geopolitical concerns.

c) Leveraged Funds (e.g., Hedge Funds, CTAs)

• Position: Net Long, but with a huge caveat. (Long: 57,669 | Short: 40,714 | Spread: 132,667)

• Interpretation: While they are net long on outright positions, their activity is dominated by an enormous spread position. This means they are primarily engaged in strategies like calendar spreads (buying one contract month, selling another) or cross-currency spreads. This is not a pure directional bet on GBP strength but rather a bet on the relationship between different contracts or currencies. It suggests they are seeking value or playing interest rate differentials rather than making a simple "up or down" prediction.

d) Other Reportables & Nonreportable Positions

• Other Reportables: A very small net short position, insignificant to the overall market.

• Nonreportable Positions (Small Speculators): Slightly net long (33,639 vs. 29,818). This group is often considered the "dumb money" and is frequently on the wrong side of major moves. Their net long position, while small, contrasts with the large institutional net short position, which is a notable divergence.

---

3. Market Sentiment & Implications

• Primary Bearish Force: The clear and large net short position from Asset Managers/Institutional investors sets a fundamentally bearish tone for the GBP.

• Counteracting Forces: This selling pressure is being absorbed by:

  1. Dealers who are required to be counterparties.

  2. Leveraged Funds who are primarily trading spreads, not outright direction.

• Market State: The market appears to be in a tense balance. The massive spread positions act as a stabilizer for now. However, this balance is fragile.

• Risk of a Squeeze: If there is a sudden positive catalyst for the GBP (e.g., a hawkish shift from the Bank of England, better-than-expected economic data), the price could rise sharply. This would force:

  • Asset Managers to cover their large short positions (buying back GBP).

  • Leveraged Funds to unwind their complex spread trades, which could involve buying GBP.
    This collective buying could fuel a significant short squeeze, leading to a rapid and powerful upward move in the Pound.

---

4. Changes from Previous Week (The "Total Changes" Row)

The second row under each position (e.g., 22,176 for Dealer Longs) shows the change from the previous week's report.

• Dealers: Increased their net long exposure. They added +22,176 longs and reduced their shorts by -29,000. This is a significant weekly shift towards a more bullish stance by this group, likely facilitating more client selling.

• Asset Managers: Moderately increased their net short exposure (+19,772 longs vs. +5,311 shorts). They are adding to their bearish bet.

• Leveraged Funds: Dramatically increased their spread positions by a massive +131,146 contracts. This is the most important change this week. It shows a huge influx into spread trading, further emphasizing that sophisticated speculators are avoiding outright directional bets in favor of more complex strategies.

• Small Speculators (Nonreportable): Increased their net long position (+12,174 longs vs. a tiny +311 shorts), reinforcing their slight bullish lean.

Conclusion

The GBP futures market is characterized by a clash between a fundamentally bearish institutional outlook and a market structure currently balanced by spread trades and dealer activity. The risk is asymmetrically tilted to the upside. While the prevailing sentiment is negative, the buildup of large short and spread positions creates the fuel for a potent rally if the current bearish narrative changes.

Disclaimer: This analysis is based solely on the provided COT report. Market conditions are dynamic, and this data should be combined with current fundamental news and technical analysis for a complete trading view.

Japanese Yen Future COT Report As of 9th Sept 2025

 

Executive Summary

The COT report reveals an extremely bearish market sentiment towards the Japanese Yen. The market is heavily net short, a position overwhelmingly driven by Dealers, who are typically considered the "smart money." This suggests strong institutional expectation for further Yen weakness. However, a significant build-up of long positions by Asset Managers provides a notable counterweight, indicating a fundamental divergence in views between major player types.

---

1. Key Overall Metrics

• Open Interest: 410,799 contracts (an increase of 3,450). This rise in open interest alongside price movement (typically down, given the net short position) can often signal a strengthening of the prevailing bearish trend.

• Number of Traders: 141. This indicates a highly institutional market.

---

2. Analysis by Trader Group

Dealers (Typically Banks & Dealers) - The "Smart Money" is Extremely Bearish

• Position: Massive Net Short.

• Long Positions: 53,701 (13.1% of OI)

• Short Positions: 204,972 (49.9% of OI)

• Net Position: -151,271 contracts (Net Short)

• Analysis: This is the most significant takeaway from the report. Dealers hold nearly four times as many short positions as long ones. They increased their net short position significantly by adding 16,568 new short contracts. This group's extreme positioning is a powerful bearish signal for the Yen.

Asset Managers / Institutional - The "Fundamental Money" is Bullish

• Position: Strong Net Long.

• Long Positions: 118,215 (28.8% of OI)

• Short Positions: 32,362 (7.9% of OI)

• Net Position: +85,853 contracts (Net Long)

• Analysis: This group holds a strong bullish conviction, acting as the primary counterforce to the Dealers. They added a substantial 38,906 long contracts. This suggests they believe the Yen is fundamentally undervalued or due for a reversal, likely based on macroeconomic factors (e.g., potential Bank of Japan policy shifts, valuation models).

Leveraged Funds (e.g., Hedge Funds) - Bearish, but Reducing Exposure

• Position: Net Short.

• Long Positions: 41,473 (10.1% of OI)

• Short Positions: 83,135 (20.2% of OI)

• Net Position: -41,662 contracts (Net Short)

• Analysis: Leveraged funds are bearish but notably reduced their net short position during the week. They covered 10,778 short contracts and also sold 16,600 spread positions (which often implies closing out bullish spread bets). This "short covering" can provide short-term support for the Yen and may indicate a cooling of the most aggressive speculative bearish bets.

Other Reportables & Nonreportables

• Other Reportables: Hold a very large net long position (98,700 vs 419), but this is likely a single or a few large entities and is less indicative of broad sentiment.

• Nonreportable Positions (Small Speculators): Are net long by 8,799 contracts. Historically, small speculators are often on the wrong side of the trade, so their net long position subtly reinforces the bearish outlook.

---

3. Market Sentiment & Implications

• Dominant Sentiment: Bearish. The market structure is defined by the colossal net short position of the Dealer group.

• Market Divergence: A classic "battle" is set up between the deep-pocketed, often well-informed Dealers (net short) and the fundamentally-driven Asset Managers (net long). The Leveraged Funds are caught in the middle, currently siding with bears but showing signs of pulling back.

• Price Outlook:

  • Short-Term: The dominance of Dealers suggests the path of least resistance is down. Further Yen weakness is possible.

  • Medium-Term: The large net long position of Asset Managers represents significant buying power. If their fundamental thesis (e.g., a hawkish BoJ pivot) plays out, they could fuel a powerful short-covering rally. The Yen has potential for a sharp rebound if market catalysts change.

4. Key Changes from the Previous Week

• Dealers became more bearish (added shorts).

• Asset Managers became more bullish (added longs).

• Leveraged Funds became less bearish (covered shorts and closed spreads).

This shows the bearish and bullish bets are both getting larger, increasing the potential energy in the market for a significant move once one side capitulates.

Conclusion

The JPY futures market is poised for high volatility. The current setup is dominated by strong bearish commercial hedging or speculation (Dealers), but is facing equally strong bullish fundamental conviction (Asset Managers). The market is heavily net short, but the largest speculative group (Leveraged Funds) is starting to reduce its bearish exposure. This creates a environment where the Yen is vulnerable to further selling, but also primed for a violent rally if the fundamental outlook shifts or if Dealers begin to take profits on their massive short positions.

---

Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. The COT report is a lagging indicator and reflects past positioning.

EuroFX Future COT Report As Of 9th Sept 2025

 

 

Overall Summary

This report reveals a market with an extremely strong and concentrated bearish sentiment towards the Euro, primarily driven by Dealer positions. However, this is heavily countered by significant bullish positions from Asset Managers. This creates a market characterized by a major standoff between two powerful player groups.

---

1. Key Market Snapshot

• Open Interest: 878,184 contracts (very high, indicating strong liquidity and interest).

• Net Change in OI: +137,284 contracts (a significant increase, suggesting many new positions were opened this period, adding to market activity and potential volatility).

---

2. Analysis by Trader Group

Dealers (Typically Banks & Dealers)

• Position: Extremely Net Short

• Long: 47,377 (5.4%)

• Short: 513,816 (58.5%)

• Net Position: -466,439 contracts

This is the most striking feature of the report. Dealers are massively short the Euro. A net short position of this magnitude (over half a million contracts) often represents hedging activity against client long positions in the OTC (over-the-counter) market or a strong fundamental bearish view. They are the dominant force pushing the Euro down.

Asset Managers / Institutional (Pension Funds, Insurance Companies)

• Position: Very Net Long

• Long: 506,920 (57.7%)

• Short: 123,669 (14.1%)

• Net Position: +383,251 contracts

This group holds the opposing, massive bullish bet. Their net long position is the dominant force supporting the Euro. This typically reflects a long-term investment view that the Euro is undervalued or will appreciate against the USD.

Leveraged Funds (Hedge Funds, CTAs)

• Position: Slightly Net Long

• Long: 103,962 (11.8%)

• Short: 71,350 (8.1%)

• Net Position: +32,612 contracts

This group is modestly net long. More importantly, look at the changes (in brackets): they reduced both their long and short positions this period (-3,849 and -5,988 respectively). This suggests a reduction in overall exposure or profit-taking, rather than a strong directional bet. Their large spread position indicates many are running relative value or pairs trades.

Other Reportables & Nonreportable Positions (Smaller Traders, Retail)

• Other Reportables: Essentially neutral with a very small net short position (-3,394 contracts).

• Nonreportable Positions (Often considered "Smart Money" or retail): are net long by +53,970 contracts. This group is often on the wrong side of major moves, so their net long position could be a contrarian bearish signal for the Euro.

---

3. The "Battle of the Titans"

The market structure is defined by the clash between two giants:

• The Bears (Dealers): Net Short -466,439 contracts

• The Bulls (Asset Managers): Net Long +383,251 contracts

This creates a precarious equilibrium. The market's direction will likely be determined by which of these groups is forced to unwind their positions. If Asset Managers start selling, the Euro could fall sharply. If Dealers are forced to cover their massive shorts, it could trigger a significant short-covering rally in the Euro.

---

4. Market Sentiment & Implications

• Bearish Bias from Concentration: The sheer size of the Dealer short position gives a strong bearish tilt to the overall market structure.

• High Potential for Volatility: The enormous open interest and the diametrically opposed positions of the two largest player groups mean that any fundamental catalyst (e.g., a major ECB or Fed policy shift, unexpected economic data) could force one side to capitulate, leading to a large and rapid price move.

• Contrarian Warning Sign? The extreme nature of the Dealer short position can sometimes be a contrarian indicator. When everyone is already positioned for a move in one direction, there are fewer sellers left, and a catalyst can cause a violent reversal (a "short squeeze").

Conclusion

The Euro FX futures market as of September 9th, 2025, is a battleground between deeply bearish Dealers and overwhelmingly bullish Asset Managers. While the massive Dealer short position casts a bearish shadow over the market, the equally large Asset Manager long position provides solid underlying support.

Trading Outlook: The market is primed for high volatility. In the near term, the balance of power slightly favors the bears due to the concentration of short positions. However, the risk of a sharp upward move (a short squeeze) is significantly elevated if any positive Eurozone news emerges. A break below key support levels could see the Asset Manager longs begin to exit, accelerating a downward move. Conversely, a break above resistance could force Dealers to cover, fueling a powerful rally.

---

 

Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. The COT report is a lagging indicator, reflecting positions from the previous Tuesday.

US Dollar Index COT Report As Of 9th Sept 2025

 

Overall Summary

The COT report reveals a market that is overwhelmingly net long the US Dollar, driven primarily by a massive bullish bet from Leveraged Funds. While Asset Managers hold a significant net short position, it is vastly outweighed by the net long positioning from other major groups. This suggests strong speculative momentum behind the dollar's strength, though it also introduces the risk of a sharp reversal if these positions are unwound.

---

Key Takeaways & Analysis

1. Dominant Bullish Sentiment from Leveraged Funds

This is the most striking feature of the report.

• Positions: Leveraged Funds (e.g., hedge funds, CTAs) hold 18,991 long contracts versus 15,755 short contracts, resulting in a substantial net long position of 3,236 contracts.

• Activity: Their net position increased dramatically from the previous week (+7,634 more longs and +13,641 more shorts). This indicates they were aggressively adding to both sides of their bets, but the net effect was a significant increase in their bullish stance. This group is often trend-following, and their aggressive buying is a strong signal of conviction in a rising dollar.

2. Asset Managers are Net Short

• Positions: Asset Managers/Institutional investors hold a significant net short position (1,770 longs vs. 10,164 shorts = a net short of 8,394 contracts).

• Interpretation: This group often takes more strategic, long-term hedged positions. Their net short position could reflect views on relative interest rates, global growth, or hedging against international asset holdings. They were actively increasing their short bets (+11,104 more shorts) while reducing longs (-1,640), showing a clear bearish shift in their stance. This creates a fundamental clash with the Leveraged Funds.

3. Dealers are Overwhelmingly Long

• Positions: Dealers (large banks) hold a massive net long position (9,792 longs vs. a mere 150 shorts). This is a nearly 65:1 ratio.

• Interpretation: Dealers are the counterparties to other traders. A large net long position suggests they have been selling futures to clients (who are buying) and are left holding the long side of the trade. This is a classic sign of a strong bullish market trend where client demand to buy is high. It can also be a contrarian indicator at extremes, suggesting the market might be overextended.

4. Other Reportables and Small Traders

• Other Reportables: This group is net short (1,555 long vs. 4,955 short), aligning more with Asset Managers.

• Nonreportable Positions (Small Speculators): This group is also net short (2,604 long vs. 3,688 short). Small speculators are often on the wrong side of major moves, so their net short position could be interpreted as a mildly bullish contrarian signal for the dollar.

---

Market Implications & Outlook

• Bullish Pressure: The combined net long positioning from the powerful Leveraged Funds and Dealers is providing significant underlying support for the US Dollar. The momentum is clearly to the upside.

• Clash of Titans: The market is divided. The momentum-driven Leveraged Funds (bullish) are facing off against the more strategic Asset Managers (bearish). The future direction will depend on which group is forced to capitulate and unwind their positions.

• Risk of a Squeeze: The extreme nature of the Leveraged Funds' long position is a warning. If the dollar's rally stalls or news triggers a reversal, these funds could be forced to sell their long contracts simultaneously to exit their bets. This could lead to a sharp, accelerated move down (a "long squeeze").

• Context is Key: This data is a snapshot. It must be combined with technical analysis (is the DXY at a key resistance level?) and fundamental drivers (Fed policy, economic data, global risk sentiment) for a complete picture. A hawkish Fed would likely fuel further gains, while a risk-off environment could see the long positions unwound quickly.

Conclusion

The COT report for September 9, 2025, paints a picture of a bullish but potentially overextended US Dollar. The market is being driven higher by aggressive speculative buying from Leveraged Funds, with Dealers facilitating this move. However, the large net long position held by speculators creates vulnerability to a sudden reversal, especially if the fundamental outlook shifts. The substantial net short position from Asset Managers provides a ceiling for the rally, setting the stage for a significant battle between these two groups.

In short: The momentum is powerfully bullish, but the market is crowded and ripe for a correction if the bullish narrative changes.

 

Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. The COT report is a lagging indicator, reflecting positions from the previous Tuesday.

EURUSD, GBPUSD and USDJPY rates reaction after U.S CPI and Unemployment claims news

 11 Sept 2025, U.S CPI and unemployment claims news released.

 

 EURUSD 15min chart.

 

 GBPUSD 15min chart

 

 

EURUSD, GBPUSD and USDJPY moves of the day 2nd Sept 2025

 The unusual trend move by these 3 major currency pairs. Move more than 150% daily average range before U.S open.

 

 

 

 

How US Non-Farm Employment Affects Currency Trading: A Comprehensive Guide

 

Introduction

The US Non-Farm Employment (NFP) report is one of the most influential economic indicators in forex trading. Released monthly by the Bureau of Labor Statistics (BLS), it provides critical insights into the health of the US labor market, influencing the US dollar (USD) and global currency markets.

In this article, we’ll explore:
✅ What is the Non-Farm Payroll report?
✅ Why is NFP important for forex traders?
✅ How does NFP impact currency pairs?
✅ Trading strategies around NFP releases
✅ Common pitfalls to avoid

By the end, you’ll understand how to leverage NFP data for smarter forex trading decisions.

---

What is the Non-Farm Payroll (NFP) Report?

The NFP report measures the number of new jobs added in the US (excluding farm workers, government employees, and non-profit organizations). Key components include:

• Total employment change (month-over-month)

• Unemployment rate

• Average hourly earnings (wage growth)

• Labor force participation rate

The report is released on the first Friday of every month at 8:30 AM EST and often triggers high volatility in forex markets.

---

Why is NFP Important for Forex Traders?

The US dollar (USD) is the world’s primary reserve currency, and the NFP report directly impacts:

1. Federal Reserve (Fed) Monetary Policy

• Strong NFP numbers (higher job growth + rising wages) → Higher inflation expectations → Fed may raise interest rates → USD strengthens.

• Weak NFP numbers (lower job growth + stagnant wages) → Economic slowdown fears → Fed may cut rates → USD weakens.

2. Market Sentiment & Risk Appetite

• A strong US labor market boosts investor confidence, supporting USD, stocks, and risk assets.

• Weak data may lead to safe-haven flows into currencies like JPY, CHF, or gold.

3. Currency Pair Reactions

• EUR/USD, GBP/USD, USD/JPY are highly sensitive to NFP surprises.

• A better-than-expected NFP typically strengthens USD, causing EUR/USD to fall.

• A worse-than-expected NFP weakens USD, leading to USD/JPY declines.

---

How to Trade NFP News in Forex

1. Pre-NFP Preparation

• Check forecasts (Bloomberg, Reuters, ForexFactory).

• Monitor ADP Employment Report (released two days before NFP) as a leading indicator.

• Be aware of previous revisions (past NFP numbers often get adjusted).

2. Trading Strategies

A) Breakout Strategy

• Place buy-stop and sell-stop orders above/before key support/resistance levels.

• NFP often causes sharp spikes, allowing traders to catch momentum.

B) Fade the Initial Move

• If the market overreacts, wait for a pullback before entering.

• Example: If USD surges post-NFP but lacks follow-through, a reversal may occur.

C) Straddle Strategy (Options Trading)

• Use forex options to profit from volatility without predicting direction.

3. Post-NFP Analysis

• Watch Fed statements and bond yields (10-year Treasury).

• Sometimes, wage growth matters more than job numbers for long-term trends.

---

Common Mistakes to Avoid When Trading NFP

❌ Trading Without a Plan – NFP volatility can lead to emotional decisions.
❌ Ignoring Revisions – Previous months’ adjustments can change market reactions.
❌ Overleveraging – High volatility increases risk; use proper stop-loss orders.
❌ Focusing Only on Headline Number – Wage growth and unemployment rate also matter.

---

Conclusion

The US Non-Farm Payroll report is a game-changer for forex traders, driving USD volatility and creating trading opportunities. By understanding how NFP impacts currency markets, preparing with the right strategies, and avoiding common mistakes, traders can capitalize on this high-impact event.

Pro Tip: Always use economic calendars (like ForexFactory) to stay updated and practice risk management when trading NFP.

---

FAQ

Q: When is the next NFP release date?
A: The NFP is released on the first Friday of each month (check ForexFactory for exact dates).

Q: Which currency pairs are most affected by NFP?
A: EUR/USD, GBP/USD, USD/JPY, and USD/CAD are highly reactive.

Q: Should I trade before or after NFP?
A: Trading after the release reduces slippage risk, but pre-positioning can work with tight risk controls.

---

By mastering NFP trading, you can enhance your forex strategy and take advantage of one of the market’s most powerful catalysts. 🚀