The ratio of long to short positions in the EURUSD stands at -1.59 as nearly 62% of traders are short. Yesterday, the ratio was at -1.48 as 60% of open positions were short. In detail, long positions are 0.9% lower than yesterday and 20.8% stronger since last week. Short positions are 6.9% higher than yesterday and 28.2% stronger since last week. Open interest is 3.8% stronger than yesterday and 9.5% above its monthly average. The SSI is a contrarian indicator and signals more EURUSD gains. The considerable jump in short positioning over the past week reflects retailers’ confidence in resistance read at 1.49. However, since retailers are usually on the wrong side of the trade on trends and breakouts, this position may foreshadow the break to 1.50 that the market has threatened for many months.
[I][B]• EURUSD – 1.50 Within Reach, Though Retailers Increasing Their EURUSD Short
• GBPUSD – Pound Positioning Flips As GBPUSD Falters Below 2.0
• USDJPY – USDJPY Longs Jump 38% Suggesting 105 On The Horizon
• USDCHF – SSI Grows Further Net Long As USDCHF Drops Below Support
• USDCAD – Positioning Extreme Cools For USDCAD, Still Above 2.0[/B][/I]
[I]We have been calling for a rally in the EURUSD since the pair was trading at 1.26. Find our more in the DailyFX Forum.[/I]
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Historical Charts of Speculative Positioning[/B]
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[B]EURUSD - [/B]The ratio of long to short positions in the EURUSD stands at -1.59 as nearly 62% of traders are short. Yesterday, the ratio was at -1.48 as 60% of open positions were short. In detail, long positions are 0.9% lower than yesterday and 20.8% stronger since last week. Short positions are 6.9% higher than yesterday and 28.2% stronger since last week. Open interest is 3.8% stronger than yesterday and 9.5% above its monthly average. The SSI is a contrarian indicator and signals more EURUSD gains. The considerable jump in short positioning over the past week reflects retailers’ confidence in resistance read at 1.49. However, since retailers are usually on the wrong side of the trade on trends and breakouts, this position may foreshadow the break to 1.50 that the market has threatened for many months.
[B]GBPUSD - [/B]The ratio of long to short positions in the GBPUSD stands at -1.04 as nearly 51% of traders are short. Yesterday, the ratio was at 1.02 as 50% of open positions were long. In detail, long positions are 14.1% higher than yesterday and 4.5% weaker since last week. Short positions are 20.5% higher than yesterday and 41.4% stronger since last week. Open interest is 17.2% stronger than yesterday and 20.1% above its monthly average. The SSI is a contrarian indicator and signals more GBPUSD gains.
[B]USDJPY - [/B]The ratio of long to short positions in the USDJPY stands at 1.90 as nearly 65% of traders are long. Yesterday, the ratio was at 1.77 as 64% of open positions were long. In detail, long positions are 31.6% higher than yesterday and 37.8% stronger since last week. Short positions are 22.7% higher than yesterday and 15.4% stronger since last week. Open interest is 28.4% stronger than yesterday and 21.9% above its monthly average. The SSI is a contrarian indicator and signals more USDJPY losses.
[B]USDCHF - [/B]The ratio of long to short positions in the USDCHF stands at 1.71 as nearly 63% of traders are long. Yesterday, the ratio was at 1.53 as 60% of open positions were long. In detail, long positions are 28.8% higher than yesterday and 51.3% stronger since last week. Short positions are 15.0% higher than yesterday and 3.7% stronger since last week. Open interest is 23.4% stronger than yesterday and 11.1% above its monthly average. The SSI is a contrarian indicator and signals more USDCHF losses.
[B]USDCAD - [/B]The ratio of long to short positions in the USDCAD stands at 2.09 as nearly 68% of traders are long. Yesterday, the ratio was at 2.00 as 67% of open positions were long. In detail, long positions are 2.7% lower than yesterday and 2.0% weaker since last week. Short positions are 6.8% lower than yesterday and 11.5% stronger since last week. Open interest is 4.1% weaker than yesterday and 0.4% below its monthly average. The SSI is a contrarian indicator and signals more USDCAD losses.
[B]How to Interpret the SSI? [/B]The FXCM SSI is based on proprietary customer flow information and is designed to recognize price trend breaks and reversals in the four most popularly traded currency pairs. The absolute number of the ratio itself represents the amount by which longs exceed shorts or vice versa. For example if the EURUSD ratio is 2.55, long customer orders exceed short orders by a ratio of 2.55 to 1. Conceptually similar to contrarian analyses using the CFTC IMM open position data or COT Report, the SSI provides an alternative approach that is both more timely and accurate in forecasting currency price movement. The SSI is a contrarian indicator that tells you how the market is weighted and where the trend may head. More long positions don’t necessary suggest more confidence in the direction of the current trend. In general, when traders start having adverse movements against their position, many tend to increase the size of their position with the purpose to average down their entry price in one last attempt to recover from previous losses. However, the higher the number of short orders in a bull market the more dangerous is to take additional shorts because many of those traders who just entered the markets are also leaving their protective stop losses just above the current price action.
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[B]For information on an FXCM Managed Account that takes advantage of the SSI, [/B]please review our Sentiment Program at: [U]Portal - FXCM.com or call +1 646-432-2968.