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.

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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).

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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

Euro FX COT Report Analysis Overview as Of 19 Aug 2025

 

Here is a detailed analysis of the Euro FX Commitment of Traders (COT) report for the week ending August 19, 2025.

 

Executive Summary

The COT report reveals a market that is structurally and heavily net short the Euro, a position primarily driven by Dealer institutions. However, the weekly changes show a subtle but notable shift: Asset Managers (the primary bulls) added to their long positions, while Leveraged Funds (the primary speculative shorts) also increased their bearish bets. This suggests a tightening battle between major players, with the overall net short position remaining extreme.

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1. Key Overall Metrics

• Open Interest (OI): 825,219 contracts (an increase of +247). The near-flat OI indicates that while positions were adjusted, very few new contracts were opened. Money is repositioning, not flooding in or out.

• Total Traders: 307. This provides context for the concentration of positions discussed below.

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2. Analysis by Participant Group

Dealers (Typically Banks & Dealers)

• Position: Extremely Net Short. This is the most significant takeaway from the report.

  • Short Positions: 501,044 contracts (60.7% of OI)

  • Long Positions: 51,466 contracts (6.2% of OI)

  • Net Position: Net Short -449,578 contracts

• Interpretation: Dealers are the counterparties to the market. Their massive net short position means they are effectively warehousing the risk from other participants who are net long. This is a strong, structural bearish signal for the Euro from the most sophisticated and risk-averse group.

Asset Managers / Institutional (e.g., Pension Funds, Insurance Companies)

• Position: Extremely Net Long. They are the natural counterpart to the Dealers.

  • Long Positions: 501,183 contracts (60.7% of OI)

  • Short Positions: 129,953 contracts (15.7% of OI)

  • Net Position: Net Long +371,230 contracts

• Weekly Change: They increased their net long position (+2,802 longs vs. -1,780 shorts). This shows continued, confident buying pressure from long-term institutional investors, likely viewing the Euro as undervalued or for strategic hedging purposes.

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

• Position: Net Short, but less so than Dealers.

  • Long Positions: 104,037 contracts (12.6% of OI)

  • Short Positions: 70,811 contracts (8.6% of OI)

  • Net Position: Net Long +33,226 contracts

• Wait, that's net long? A common point of confusion. In this specific report, Leveraged Funds are actually net long. However, it's crucial to look at the weekly change:

  • Weekly Change: They increased their net short exposure significantly. They added +4,888 short contracts while only adding +3,178 long contracts. This is a clear bearish bet from the speculative community.

Other Reportables & Nonreportable Positions (Smaller Traders)

• These groups are generally net short and made smaller adjustments, but their impact on the overall market is less significant than the three main groups above.

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3. Market Sentiment & Implications

• The "Battle of the Titans": The market is defined by a colossal standoff between Dealers (massive net short) and Asset Managers (massive net long). This creates a fragile equilibrium.

• Speculative Sentiment: The actions of Leveraged Funds are key. Their move to increase net short bets this week aligns them more closely with the Dealers' bearish outlook. This suggests speculative money is betting on Euro weakness in the near term.

• Price Outlook:

  • Bearish Case: The enormous net short position from Dealers is a powerful underlying bearish force. If Leveraged Funds continue to build shorts and Asset Manager buying wanes, significant downward pressure on the Euro could occur.

  • Bullish Case (Squeeze Potential): The market is overwhelmingly positioned for Euro weakness. If a positive catalyst emerges (e.g., a shift in ECB policy, weak US data), these massive short positions would need to be covered (i.e., buy back Euros). This could trigger a very sharp, rapid rally—a classic short squeeze.

Conclusion

The Euro FX futures market as of August 19, 2025, is poised for potential volatility. The market structure is heavily net short, dominated by Dealers, while the fundamental long-term buying from Asset Managers continues. The key development this week is that speculative Leveraged Funds have joined the bearish side.

Traders should watch for any catalyst that could force one of these major groups to unwind their positions. A break lower would validate the speculative shorts, while an unexpected rally could force them to cover, accelerating the move upward.

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.

 

British Pound COT report Analysis as of 19 Aug 2025

 

Here is a detailed analysis of the Commitments of Traders (COT) report for British Pound Futures as of August 19, 2025.

 

Executive Summary

The report reveals a market that is overwhelmingly net short the British Pound, driven primarily by a massive bearish position from Asset Managers. This selling pressure is being absorbed by Leveraged Funds and Dealer Intermediaries, who hold significant net long positions. The market structure suggests a strong bearish sentiment among institutional investors, with speculative players betting against it.

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1. Key Market Overview

• Open Interest: 219,831 contracts (a decrease of 13,749 from the previous week). This decline in open interest, alongside a falling price, often suggests long positions are being liquidated or closed out, reinforcing the bearish trend.

• Total Traders: 184

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2. Analysis by Trader Group

Dealer/Intermediary

• Position: Net Long (+40,425 contracts)

  • Long: 60,669

  • Short: 20,244

• Interpretation: Dealers are typically the "smart money" that takes the other side of client trades. Their significant net long position means they are effectively buying the Pound from others who are selling (primarily Asset Managers). This is a classic risk-off flow where institutions hedge their FX exposure by selling to dealers.

Asset Manager/Institutional

• Position: Extremely Net Short (-67,141 contracts)

  • Long: 45,610

  • Short: 112,751

• Interpretation: This is the most significant finding in the report. Institutional investors hold a massive net short position, representing the core bearish sentiment in the market. This group includes pension funds, insurance companies, and other entities that are likely hedging their UK asset exposure or making a outright bearish bet on the GBP.

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

• Position: Net Long (+22,454 contracts)

  • Long: 64,243

  • Short: 41,789

• Interpretation: Leveraged funds are speculative "fast money." Their net long position indicates they are betting against the prevailing bearish trend set by Asset Managers. They might be anticipating a short-term bounce or a reversal. However, the large increase in their short positions (+15,954) shows that a portion of this group is also joining the sell-side, creating a mixed picture.

Other Reportables & Nonreportable Positions (Smaller Traders)

• Position: Slightly Net Short for Other Reportables; Net Long for Nonreportables.

• Interpretation: These groups (smaller speculators and retail traders) have a minimal aggregate impact on the market direction compared to the large players.

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3. Net Position Summary & Market Sentiment

Trader Group	Net Position	Sentiment	Role
Dealer/Intermediary	+40,425	Bullish	Smart Money, absorbing sells
Asset Manager/Institutional	-67,141	Extremely Bearish	Driving the market trend
Leveraged Funds	+22,454	Bullish	Speculating against the trend
Other/Nonreportable	~+4,300	Slightly Bullish	Minor influence

Overall Market Sentiment: BEARISH. The sheer size of the net short position from Asset Managers dominates the market's posture.

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4. Changes from the Previous Week (The "Change" Row)

The numbers below the positions show the weekly change. This is crucial for understanding momentum.

• Asset Managers: Increased their net short position dramatically.

  • They added +11,020 new long contracts but added a staggering +31,050 new short contracts. This is a clear and aggressive move to the bearish side.

• Leveraged Funds: Their activity was mixed but leaned bearish.

  • They added +11,030 longs but also added a massive +15,954 shorts. This shows they were actively selling into the market decline, even while maintaining a net long book.

• Dealers: Increased their net long position.

  • They added more longs (+1,474) than shorts (+1,225), confirming they were consistent buyers.

• Nonreportable (Small Specs): They were forced out of long positions, closing -2,381 contracts, and were heavily shorted against, adding +41,564 new short contracts. This is a classic sign of capitulation from the retail/small speculator crowd, often a contrarian signal that a move may be nearing exhaustion.

  5. Trading Implications & Conclusion

• Bearish Dominance: The market structure is fundamentally bearish due to institutional hedging/selling.

• Contrarian Signals: The fact that "smart money" Dealers are net long and that small speculators (Nonreportables) were net sellers and massively increased their short exposure can be seen as a contrarian bullish signal. Historically, when the crowd is extremely positioned one way, a reversal becomes more likely.

• Key Levels to Watch: The market is poised for a significant move.

  • If the bearish fundamental story (e.g., weak UK economic data) continues, the Asset Managers could push prices even lower. Their positioning is not yet at an extreme that suggests a reversal is imminent.

  • However, the buildup of long positions from Leveraged Funds and Dealers, combined with the capitulation of small specs, means any positive trigger for the GBP could lead to a sharp short-covering rally as these massive short positions are bought back.

In summary, the COT report paints a picture of a deeply bearish market driven by institutional flows, but one that is also showing early classic signs of being over-extended to the downside, setting the stage for a potential powerful reversal when sentiment shifts.

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Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. The COT report is a lagging indicator and should be used in conjunction with other technical and fundamental analysis.

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