Dollar in the lead, but flows are opening up divergences

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USD, EUR, GBP, JPY, CHF, CAD, AUD, NZD

Week

WPI / Seasonality

Update 07/07/2026

COT Report

Data as of 30/06/2026

1. The week's message

The dollar remains the reference point of the currency map, but the reading is no longer as homogeneous as in the previous week. The strength of the greenback continues to weigh on the basket, but the updated COT, forward and seasonality data introduces greater dispersion among the majors. GBP and NZD remain the most fragile counterparts, while CAD and JPY are showing signs of improvement that call for a more selective reading. The operational message is therefore not "long USD against everything", but rather building the view on pairs where the relative advantage remains clearest.

Leadership

USD still the lead currency

The dollar retains its central role in the basket, but the signal is more selective compared to the previous reading.

Fragility

GBP and NZD remain more exposed

Sterling and the New Zealand dollar combine weak institutional flows with low relative quality of the recovery.

Divergences

CAD and JPY to monitor

Short covering and forward repricing make these two currencies less straightforward to read against the dollar.

2. Flexible Grid / WPI

The short-term picture remains polarised: the DXY is the only asset in Strong territory, while all other majors are still in Weak. Over the longer term, the picture is less uniform: the dollar remains in Strong territory, but AUD, GBP, EUR and CHF are positioned in Weakening, while CAD, JPY and NZD remain in Weak. The reading therefore stays favourable to the greenback, but with higher internal dispersion relative to the simple tactical snapshot.

WPI lungo periodo aggiornato — **WPI Long Term.** DXY in Strong; CAD, JPY and NZD in Weak; AUD, GBP, EUR and CHF in Weakening. The structural picture remains favourable to the dollar but is no longer uniform across all majors.

WPI breve periodo aggiornato — **WPI Short Term.** DXY the sole element in Strong; all other majors still in Weak. Tactical reading favourable to the dollar, but to be filtered through COT and forward data.

Reading rule. In the WPI, currencies are represented against USD. Weakness in JPYUSD, CHFUSD or CADUSD implies a favourable reading for USD/JPY, USD/CHF or USD/CAD respectively.

Currency / index	Short-term WPI	Long-term WPI	Translation to the conventional pair
DXY	Strong	Strong	Dollar leadership confirmed in both the tactical snapshot and the underlying picture.
EUR	Weak	Weakening	EUR/USD remains under pressure in the short term, but over the longer term the weakness is less extreme than for CAD, JPY and NZD.
GBP	Weak	Weakening	Sterling fragile in the short term; over the long term it is not yet in Weak territory, but the deterioration in flows remains the critical point.
AUD	Weak	Weakening	AUD/USD remains vulnerable in the short term, albeit with a less deteriorated long-term structure compared to the weakest currencies in the basket.
NZD	Weak	Weak	Weakness confirmed across both horizons: among the most fragile counterparts against USD.
JPY	Weak	Weak	Picture still favourable for USD/JPY; COT shows short covering, but not yet a regime change.
CHF	Weak	Weakening	USD/CHF remains supported in the short term, with the franc less weak over the long term compared to the yen, CAD and NZD.
CAD	Weak	Weak	USD/CAD remains favoured, but the reduction in CAD shorts calls for a less mechanical reading.

3. Seasonality and maximum synchronisation

Seasonality this week does not overturn the dollar's picture, but introduces some important differences among the majors. The DXY remains in Partial Sync with a constructive bias; euro, CAD, CHF and AUD enter more favourable synchronisation windows; sterling remains out of sync; the yen offers no actionable signal.

Massima sincronizzazione stagionale — Max Sync. The platform selects, for each currency, the historical depth that is currently best replicating the price's current behaviour. Thanks to the mosaic mode, the panel compares the entire Forex basket and immediately highlights, for each currency, the seasonal curve today most closely aligned with price behaviour.

Instrument	Max Sync Curve	Status	Reading of the current window
DXY	5 years	Partial Sync	The pattern remains favourable for the dollar, but it is not a fully clean seasonal signal.
EUR	10 years	Entering Sync	Seasonality is entering a more constructive window; useful as a confirming element, not as a standalone driver.
GBP	5 years	Out of Sync	Unreliable signal, insufficient to offset the deterioration in the COT.
CAD	10 years	Entering Sync	A constructive window that compounds the short covering seen among Asset Managers.
CHF	20 years	Entering Sync	A factor supportive of the franc, diverging from a still-weak COT.
JPY	5 years	Unknown	Seasonality cannot be used as a directional filter at this stage.
AUD	10 years	Entering Sync	Entering synchronisation, but price remains fragile and the COT does not confirm.
NZD	5 years	Partial Sync	Partial synchronisation, with the curve not yet sufficiently favourable.

6A Australian Dollar Future

Focus 6A. In the case of the Australian Dollar Futures, the platform selects the 10-year curve, signalling a status of Entering Sync with a Sync Level of +0.12 and a Sync Trend of +0.42. For the selected pattern, the statistics further highlight an average return per trade of +2.36%, a win rate of 78%, and a 9-year cumulative return of +21,2%. In addition, the July monthly statistic for the selected sample shows an average of +0,6% with a positive frequency of 60%, a useful element for contextualising the current seasonal window within the present month.

4. COT Report — Asset Managers

The Asset Manager COT confirms the dollar, but does not equally confirm all readings across individual major currencies. The most pronounced improvement is in the yen, driven by a sharp reduction in short positions; the CAD also shows short covering. Conversely, GBP and NZD record the most evident deterioration, while AUD and CHF remain fragile.

Asset	Total Long	Total Short	Δ Long	Δ Short	Delta Change	Reading
DXY / USD	22.171	2.110	+1.144	−207	+1.351	Dollar confirmation: new longs added and short positions reduced.
EUR	470.602	215.444	+8.309	+7.881	+428	Flow nearly balanced; the long stock remains still significant.
GBP	12.147	168.454	−1.018	+5.865	−6.883	Clear deterioration: longs declining and shorts increasing.
AUD	53.713	92.920	−2.523	−323	−2.200	Negative pressure, driven primarily by a reduction in long positions.
NZD	7.332	64.542	−545	+6.186	−6.731	Marked deterioration: new shorts added and longs contracting.
JPY	71.903	140.596	−995	−10.666	+9.671	Strong relative improvement, driven by short covering.
CHF	7.019	48.348	−1.093	+467	−1.560	Still-weak picture: fewer longs and shorts on the rise.
CAD	50.641	131.885	−1.885	−4.509	+2.624	Improvement through short covering, although the overall positioning remains skewed.

The key point. The COT confirms the dollar's leadership, but also reveals more pronounced divergences: GBP and NZD remain the weakest areas, while CAD and JPY are improving through short reduction or less adverse flows.

5. Official Rates and 1-Year Forwards

The comparison places the current official rate alongside the one-year forward rate. The forward is not a certain forecast of the next central bank decision: it is the implied level embedded in the curve and serves to indicate whether the market is pricing, over a one-year horizon, a more restrictive, more expansionary, or broadly stable policy stance.

Currency	Current Official Rate	1Y Forward	Message
USD	3,50%–3,75% Federal Funds target range	4,305%	Restrictive The forward sits above the current Fed target range: the curve continues to embed higher rates over the one-year horizon, an element consistent with the dollar's leadership.
EUR	2,25% ECB deposit facility rate; MRO 2.40%	2,816%	Moderate tightening The market is pricing a level above the current rate. Monetary support is present, but confirmation must come from flows and price action.
GBP	3,75% Bank Rate	4,451%	Rate hike priced in The curve remains well above the official rate. This is the primary positive divergence for sterling, but it is currently being neutralised by the COT deterioration.
JPY	1,00% Overnight call rate target	1,669%	Normalisation The forward incorporates further normalisation by the BoJ. The reading is consistent with short covering on the yen, even though the price regime has not yet changed structure.
CHF	0,00% SNB policy rate	0,167%	Less expansionary The forward returns slightly positive: a less expansionary signal compared to the previous reading, but still too subdued to become a primary driver.
CAD	2,25% Target overnight rate	3,095%	Decisive repricing higher The market is pricing in a level materially above the current rate. Combined with short covering, this makes the CAD a currency to watch, despite near-term tactical weakness.
AUD	4,35% Cash rate target	4,484%	Nearly stable The forward is only moderately above the cash rate. Monetary support is present but not strong enough on its own to offset still-fragile flows.
NZD	2,50% Official Cash Rate	3,878%	Sharp repricing This is the widest repricing in the basket. The curve builds potential support for the NZD, but the COT remains decisively adverse and price action has yet to validate it.

How to read this section. The most interesting signal is not the absolute level of the forward, but its consistency with the other modules. JPY and CAD show an initial alignment between monetary repricing and improving COT; GBP and, most notably, NZD display more restrictive forwards without equally clear confirmation from positioning. AUD is nearly neutral, while CHF moves from a slightly negative reading to a marginally positive curve.

Official rates verified as of 8 July 2026. Sources: Federal Reserve · ECB · Bank of England · Bank of Japan · Swiss National Bank · Bank of Canada · Reserve Bank of Australia · Reserve Bank of New Zealand.

6. Major pairs map

GBP/USD

Dominant driver Asset Manager flow is the most penalising in the basket: longs declining and shorts rising.

Confirmation Seasonality is out of sync and does not offer reliable support for sterling.

Divergence The UK forward remains elevated relative to the Bank Rate, but the flow market has yet to validate it.

Change condition Stabilisation of shorts and a return of demand for long GBP positions are required.

AUD/USD

Dominant driver Positioning remains fragile: Asset Managers are reducing longs while maintaining a higher short inventory.

Confirmation The AUD forward is only moderately above the cash rate and does not add a decisive monetary impulse.

Divergence The 10-year seasonality is coming into sync, but price action has yet to translate it into strength.

Change condition The picture would improve only with a halt to the reduction in longs and a relative recovery in AUD.

NZD/USD

Dominant driver COT deterioration is pronounced: shorts rising sharply and longs contracting.

Confirmation Seasonal synchronisation is only partial and does not offset the fragility of flows.

Divergence The NZD forward remains well above the OCR, meaning the rate curve is more constructive than price.

Change condition First confirmation required: short covering among Asset Managers and a price recovery that is not merely tactical.

EUR/USD

Dominant driver The euro is less weak than the other majors because it retains a very significant institutional long inventory.

Confirmation The weekly COT change is nearly balanced and the forward rises above current rate levels.

Divergence The dollar continues to receive confirmation from flows, so EUR/USD does not yet have a clean directional edge.

Change condition Continuation of EUR long flows alongside a loss of momentum in the dollar is required.

USD/JPY

Dominant driver The monetary differential continues to favour the dollar in the classic pair.

Confirmation The yen remains skewed to the short side in terms of overall open interest.

Divergence The sharp reduction in JPY shorts is the most notable improvement across the entire COT.

Change condition Further short covering and price confirmation would make the pro-USD/JPY view less robust.

USD/CHF

Dominant driver The franc remains penalised by the COT: longs declining and shorts rising.

Confirmation The dollar maintains a positive Asset Manager flow, with longs increasing and shorts declining.

Divergence CHF seasonality comes into synchronisation and the forward turns slightly positive.

Exchange condition Short covering on CHF and a price reaction are needed to reduce the dollar's advantage.

USD/CAD

Dominant driver CAD remains heavily skewed to the short side, though the weekly change shows improvement.

Confirmation The Canadian forward prices in a level significantly above the current rate and seasonality comes into synchronisation.

Divergence The dollar still maintains leadership and favourable flow, so the CAD signal is not yet sufficient to reverse USD/CAD.

Exchange condition A shift in the picture requires persistent short covering on CAD and a loss of relative dollar strength.

7. Scenario map

Dominant scenario

The dollar remains the leading currency, but signal quality varies considerably depending on the counterpart. The most straightforward reading remains against GBP and NZD; AUD stays weak but with a seasonal window to monitor. EUR is more balanced, while JPY, CHF and CAD present divergences that make an indiscriminate pro-dollar reading less efficient.

What could invalidate it

Loss of the dollar's relative leadership in the near term.
Simultaneous short covering and a return of buying interest in the most penalised majors.
Continuation of the institutional improvement in the yen and the Canadian dollar.
Transformation of the forward repricing in CAD, GBP or NZD into effective and persistent demand for the respective currencies.

Conclusion. The overall picture remains dollar-favourable, but counterpart selection is decisive. GBP/USD and NZD/USD offer the most straightforward reading; AUD/USD remains weak but less clean; EUR/USD requires additional confirmation, while USD/JPY, USD/CHF and USD/CAD remain constrained by conflicting signals in flows, forwards or seasonality.