CFTC data shows eurozone EUR non-commercial net positions fell to €174.5K. The previous reading was €180.3K.
The latest CFTC data shows speculative net long positions in the euro fell for a second week in a row. This means large traders are cutting back on bullish bets. It is a warning sign we should take seriously.
This change in positioning matches recent data. Eurozone Manufacturing PMI unexpectedly fell to 48.2, below the 49.5 forecast, which signals contraction. At the same time, US inflation came in a bit hotter than expected. That supports the view that the Federal Reserve may stay hawkish longer than the European Central Bank. This gap in policy outlook often leads to a weaker euro versus the dollar.
Given this backdrop, we should consider buying downside protection on the euro. Buying EUR/USD put options with expiries in the next four to six weeks could help us benefit if the euro weakens further. Implied volatility has risen slightly, but it is still well below the late-2025 highs, so options remain relatively affordable.
If you want a less directional trade, another option is to sell out-of-the-money call spreads on the euro. This lets us collect premium while betting the euro’s upside is limited in the near term. It’s a practical way to express a neutral-to-bearish view without needing a large drop.
We should also remember how quickly sentiment flipped in the second half of 2025 when positioning became too crowded. While €174.5K net long is not extreme by historical standards, the direction is clear: bullish conviction is fading. It will be important to watch upcoming economic data closely.
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