USD Positioning and Near-Term Volatility: Navigating Tactical Opportunities Amid Delayed Jobs Data

The U.S. dollar's positioning in forex markets has reached a critical inflection point, with the latest Commitments of Traders (COT) reports revealing extreme bearish sentiment among large speculators. As the delayed U.S. jobs data looms-a key event for recalibrating global monetary policy-traders must grapple with the implications of these positioning extremes and the operational challenges facing the CFTC. This analysis unpacks the current landscape, offering actionable insights for tactical positioning.

Extreme Bearish Sentiment in USD Positioning

As of September 2, 2025, the USD INDEX - ICE FUTURES U.S. (Code-098662) showed a net short position of 5,021 contracts, with open interest at 31,502. This follows a broader trend: asset managers maintained a near-record net-short exposure of -8,200 contracts in the U.S. dollar index as of July 8, 2025, despite the USD's ongoing rally. Such positioning suggests a market that has priced in aggressive Federal Reserve easing, with gross shorts nearing a four-year high.

The divergence in positioning across major currencies further amplifies risks. While the euro has seen rising bullish sentiment, the Japanese yen's net-long exposure has weakened, reflecting shifting capital flows. These imbalances often precede sharp corrections, as crowded short positions in the USD could face forced coverings if the delayed jobs data surprises to the upside.

Operational Delays and Market Uncertainty

The CFTC's delayed release of November 2025 COT reports-due to a government shutdown from October 1 to November 12, 2025-has compounded uncertainty. Normally published at 3:30 p.m. Eastern Time on Fridays, these reports are now being released in chronological order post-shutdown according to CFTC updates. For instance, the report for November 18, 2025, was published only after operations resumed, while the November 25 report remains pending as reported by market sources.

These delays create a vacuum in real-time sentiment analysis, forcing traders to rely on older data. The CFTC has pledged to accelerate backlogged reports, but the timeline for full data restoration remains unclear. This operational friction adds a layer of unpredictability to market dynamics, particularly as the delayed jobs data-expected to reshape Fed policy expectations-approaches.

Tactical Positioning Strategies

Given the current positioning extremes and operational delays, traders should adopt a dual approach:

1. Hedging Against Volatility: With USD shorts at historically bearish levels, a modest long bias in the dollar-particularly against the euro and yen-could capitalize on potential short-covering rallies. Historical precedents show that extreme net shorts often precede short-term USD strength, especially if jobs data outperforms expectations.

2. Monitoring CFTC Resumption: As the CFTC resumes normal operations, the sequential release of backlogged COT reports may reveal shifts in positioning that were previously obscured. Traders should closely watch the November 18 report for clues about commercial traders' hedging activity, which often signals longer-term trends.

3. Scenario Planning for Jobs Data: The delayed jobs report-likely to be released in early December 2025-could trigger sharp repositioning. If the data shows stronger-than-expected wage growth, the current USD shorts may face margin calls, accelerating a short squeeze. Conversely, a weak report could validate existing bearish positioning, but the risk of a "buy the rumor, sell the fact" dynamic remains.

Conclusion

The USD's positioning in November 2025 reflects a market at a crossroads. While extreme bearishness suggests a potential short-term reversal, the operational delays in COT reporting and the pending jobs data introduce significant noise. Tactical positioning should prioritize flexibility, with a focus on managing downside risks in a landscape where liquidity and sentiment shifts could move markets rapidly.