Australia’s CFTC data showed AUD non-commercial net positions increased to 85.6K, up from 85K in the previous reading. The move represents a rise of 0.6K in speculative positioning, pointing to a modest build in net longs over the period.
Speculators Positioning For Potential AUD Strength
We see the small rise in net long Australian dollar positions as speculators cautiously positioning for potential AUD strength. This marginal increase suggests that while conviction is low, the bias is shifting away from the bearish sentiment seen earlier this year. The market is slowly waking up to the Reserve Bank of Australia’s hawkish stance compared to other central banks.
This view is supported by Australia’s persistent inflation, which came in at 3.8% for the first quarter of 2026, keeping pressure on the RBA to maintain its 4.35% cash rate. At the same time, iron ore prices have rebounded to over $115 a tonne amid signs of improving industrial activity in China. We believe these fundamental factors create a solid floor for the currency.
Strategic Outlook And Trading Approaches
For the coming weeks, we favor using options to express a moderately bullish AUD/USD outlook. Buying call spreads with July 2026 expiry dates allows for participation in any upward move while defining our risk. This is a more prudent approach than holding outright long futures, given that global growth concerns could still trigger volatility.
Historically, we’ve seen similar setups in 2024 where a hawkish RBA and stable commodity prices led to sustained AUD rallies against currencies with dovish central banks. Therefore, we are also looking at selling AUD/CAD or AUD/CHF puts to collect premium, betting that the Aussie will outperform on these crosses. Traders should remain watchful of Chinese manufacturing data, as any unexpected weakness there poses the primary risk to this outlook.
