Investors added NOK vs. EUR longs while also adding DXY shorts

Overview

This report is a G10 FX strategy positioning tracker published by Morgan Stanley on July 20, 2026. Using FX options pricing data, futures market positioning, and sentiment indicators, it examines changes in investor positioning across major G10 currencies, highlighting increased NOK vs. EUR longs, increased DXY shorts, increased GBP futures longs, and increased AUD futures shorts.

Core views

The core views are: the options market shows tactical investors favoring long NOK vs. EUR and short EUR positions; the futures market shows investors long EUR and short NZD and CAD; on the dollar side, both options and futures data show net long USD positioning, but speculative DXY futures positioning as a share of open interest fell from 52.6% in the prior week to 51.3%. The report also points out that CAD sentiment improved the most within G10.

Analysis framework

The report uses positioning scores and market subcomponent analysis: on one hand, it infers investors' relative long-short direction from FX options pricing; on the other hand, it uses futures market positioning to validate or compare spot FX direction, while also combining the Daily Sentiment Index to track changes in G10 currency sentiment. The contrarian trading strategy identifies potentially valuable trade directions based on positioning score percentiles.

Methodology notes

• Market positioning analysisFX options positioning scores

  FX options positioning scores

  Uses FX options pricing data to measure investors' long-short bias across different currency pairs; the report states that the related scores are published daily on Bloomberg.

• Derivatives holdings analysisfutures positioning

  Futures market positioning

  Observes directional positions in currencies such as GBP, AUD, EUR, NZD, CAD, and USD through changes in futures market holdings.

• Sentiment indicatorDaily Sentiment Index

  Share of bullish traders in DSI

  Measures currency sentiment by the proportion of bullish traders; the report notes that as of July 17, 2026, CAD sentiment showed the largest improvement within G10.

• Trading frameworkcontrarian trading strategy

  Contrarian trading based on positioning score percentiles

  When positioning scores show crowded or extreme market positioning, the contrarian strategy is used to look for potential value in the opposite direction; this report gives a value signal for NZD/NOK, but there is inconsistency between the summary and body regarding whether the direction is long or short.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• NOK vs. EUR

  Longs increased in the options market, representing the report's most important positioning change.

  Strengths

  Both the options data and the discussion of tactical investors support a long NOK vs. EUR direction.

  Weaknesses

  The report does not provide specific positioning size or percentile figures.

  Comparison

  Relative to EUR, NOK is more favored on the long side in options positioning.

  Risks

  If positioning becomes overly crowded or macro catalysts reverse, the long NOK vs. EUR trade may face drawdowns.

• DXY

  Shorts increased in the options market, but futures data still show net long USD positioning.

  Strengths

  The increase in DXY shorts shows that some investors are positioning for a weaker U.S. dollar index.

  Weaknesses

  The options and futures signals are not fully consistent, and overall USD positioning remains net long.

  Comparison

  Speculative DXY futures positioning as a share of open interest fell from 52.6% to 51.3%, indicating a marginal weakening in USD long strength.

  Risks

  If U.S. dollar fundamentals strengthen again, DXY shorts may come under pressure.

• GBP

  Longs increased in the futures market.

  Strengths

  The change in futures positioning supports marginal long demand for GBP.

  Weaknesses

  The report does not provide confirmation from the GBP options side.

  Comparison

  In contrast with AUD, GBP futures saw an increase in longs while AUD saw an increase in shorts.

  Risks

  If U.K. macro conditions or rate expectations weaken, GBP longs may retrace.

• AUD

  Shorts increased in the futures market.

  Strengths

  The futures market provides a clear incremental bearish signal for AUD.

  Weaknesses

  The report also says leveraged funds are the most long AUD, indicating possible divergence across investor types.

  Comparison

  Asset managers are long EUR and short GBP; leveraged funds are most long AUD and most short NZD.

  Risks

  If risk appetite improves or positive AUD catalysts emerge, AUD shorts may be squeezed.

• NZD/NOK

  The contrarian trading strategy generates a value signal.

  Strengths

  Based on positioning score percentiles, there may be a contrarian trading opportunity.

  Weaknesses

  The report summary says long NZD/NOK, while the main text says short NZD/NOK, creating a textual inconsistency in direction.

  Comparison

  This signal differs from simply trend-following the long NOK vs. EUR trade, as it is based on a contrarian framework tied to positioning crowding.

  Risks

  The inconsistent direction description means the original chart or Bloomberg positioning scores must be checked before trade execution.

Key data

• Report date2026-07-20 02:06 PM GMTCover timestamp.
• Options data observation cutoff date2026-07-17Used for judgments related to NOK vs. EUR, DXY, EUR, and CAD sentiment.
• Futures data observation cutoff date2026-07-13Used for judgments on futures positioning in GBP, AUD, EUR, NZD, CAD, and USD.
• NOK vs. EUR options positioningLongs increasedOptions pricing data show that investors added NOK vs. EUR longs.
• DXY options positioningShorts increasedThe report says investors added DXY shorts.
• GBP futures positioningLongs increasedInvestors added GBP longs in the futures market.
• AUD futures positioningShorts increasedInvestors added AUD shorts in the futures market.
• DXY speculative futures positioning51.3% of open interestFor the week ending July 13, 2026, down from 52.6% in the prior week.
• CAD sentimentImproved the most within G10Based on the Daily Sentiment Index observation as of July 17, 2026.

Impact & implications

For FX investors, the report suggests that NOK vs. EUR longs and DXY shorts have become important tactical directions in the options market, while GBP and AUD have seen incremental positioning changes in opposite directions in the futures market. If using a contrarian framework, particular attention should be paid to whether positioning has already become crowded, as well as to the execution risk arising from the report's inconsistent description of the NZD/NOK direction.

Risks

• The report mainly relies on positioning and sentiment data and does not provide a full discussion of macro fundamentals, rate differentials, central bank policy, or valuation.
• Options and futures positioning may reflect hedging demand rather than purely directional views.
• Some currencies show divergence across investor types; for example, AUD may present different signals between overall futures changes and leveraged fund positioning descriptions.
• The contrarian trade direction for NZD/NOK is inconsistent between different sections of the report, so the original charts should be checked before using it for trading decisions.
• Morgan Stanley discloses that it may have business relationships with the companies or instruments covered by its research, and investors should treat this report as one input rather than the sole basis for decisions.

What to watch

• Whether the daily FX options positioning scores published on Bloomberg continue to show crowded long NOK vs. EUR positioning.
• Whether the increase in DXY options shorts will carry over into a further decline in U.S. dollar longs in the futures market.
• Whether GBP longs and AUD shorts continue in the next week's CFTC or futures positioning data.
• Whether improving CAD sentiment translates into actual positioning and FX performance.
• The original chart direction and percentile position of the NZD/NOK contrarian trading signal.