1. The COT report: what big traders hold
Every week the US Commodity Futures Trading Commission (CFTC) publishes the Commitments of Traders (COT) report, showing the positions held in futures markets, including the currency futures traded in Chicago. It comes out on Friday at 3:30 p.m. New York time, with data as of the previous Tuesday. In India that's around 01:00 IST on Saturday while the US is on summer time and 02:00 IST in winter. In a week with a US federal holiday it usually comes out on the following Monday instead, at the same time.
| Report | Groups it shows | Useful for |
|---|---|---|
| Legacy | Non-commercial (mostly speculators) and commercial (hedgers) | The classic speculator long-versus-short view |
| Traders in Financial Futures | Dealers, asset managers, leveraged funds and others | What hedge funds (leveraged funds) and asset managers are doing |
Traders watch for extremes. A record speculative net long can mean few buyers are left, which some traders read as a sign a reversal may be closer. The data is already three days old when it's published, so it's a backdrop for the bigger picture, not a timing tool.
2. Retail positioning: what other traders are doing
Several brokers and websites publish the share of their own clients who are long or short each pair:
- IG Client Sentiment: the long and short split of IG's clients, shown on its platform.
- Myfxbook Community Outlook: positions across accounts linked to Myfxbook. On 4 October 2026 it showed 74% of GBPJPY positions long.
- OANDA's order book and position book: where OANDA's clients have open positions and pending orders.
- Dukascopy's SWFX sentiment index: the long-minus-short difference, updated every 30 minutes.
Many traders read these as a contrarian signal. IG's analysts, for example, say retail traders tend to sell into rising markets and buy into falling ones, so a mostly-long crowd is often taken as a bearish sign. It's a reading, not a rule; crowds can stay right for a long time in a strong trend.
3. Risk-on and risk-off
The broadest kind of sentiment is the market's appetite for risk. When investors feel confident ("risk-on"), money tends to flow to growth-sensitive currencies such as the Australian and New Zealand dollars. When they're nervous ("risk-off"), it flows to safe havens. An IMF study of risk-off episodes found that "the Japanese yen, Swiss franc, and U.S. dollar appreciate".
- Signs of risk-off: falling stock markets, a jump in volatility, rising gold, and the yen and franc gaining against everything.
- What it does to pairs: crosses such as GBPJPY and AUDJPY tend to fall hard; USDJPY can go either way, because both sides are havens.
The currency strength meter shows the result: if the yen and franc top the list while the Australian dollar sits at the bottom, the market is in risk-off mode.
How to use sentiment in your trading
- Start with the risk mood for the day, from stock futures, gold and the strength meter.
- Check positioning for extremes, not for small changes: a 55/45 retail split says little; 80/20 says more.
- Let price decide the entry. Sentiment tells you which side may be crowded; price action at a level tells you when.
- Know the calendar. Central bank decisions and US data can flip sentiment in minutes; see forex news today.