CFTC Positioning Report: EUR turns negative while USD regains the smile

These are the main takeaways from the CFTC Positioning Report for the week ending October 22.

• Speculators shifted to a net short position on the Euro for the first time since late April, with gross longs retreating for the fifth week in a row. Non-commercial traders held slightly net short positions (8K contracts), while overall open interest dipped once again. During this period, EUR/USD continued to lean bearish, breaking below the 1.0900 support level and extending a downward trend that began at the start of the month, always against the backdrop of the incessant rally in the US Dollar.
• Speculative net longs in the British pound receded to five-week lows around 74.5K contracts amidst a decent drop in open interest. GBP/USD attempted to reverse the ongoing decline, although it eventually succumbed to the broad-based offered stance in the risk-linked universe, breaching the key 1.3000 region.
• Non-commercial players continued to reduce their net longs in the Japanese Yen. In the same line, hedge funds trimmed further their net shorts, while open interest rose for the fourth week in a row. USD/JPY kept its constructive performance well in place on the back of the inaction of the BoJ, the unabated recovery in the US Dollar and rising US yields across the board.
• After two weeks in a row in the negative region, speculators shifted to net longs in the US Dollar (18.2K contracts) amidst a decent uptick in open interest. The US Dollar Index (DXY) maintained its bullish stance, flirting with the 104.00 region for the first time since early August.
• Net long positions in gold have climbed to their highest in three weeks, reaching just over 296K contracts, while open interest has also shown steady growth. The precious metal has been on a strong upward trend, driven by expectations of further easing from major central banks and rising geopolitical tensions, especially in the Middle East. Gold prices have been setting new record highs almost daily, reflecting its appeal as a safe haven in uncertain times.