[B]EUR[/B][B]/USD Ratio: 1.10
[/B][B]Signal: Bearish[/B]
[B]Currency[/B] [B]Last Week[/B] [B]Present*[/B] [B]% Long[/B] [B]% Change in Positions Outstanding[/B] [B]Signal[/B] EURUSD 1.31 [B]1.10[/B] 52% 1.08% Bearish
[B]EURUSD – [/B]The consensus is still out on whether the EURUSD is seeing the beginnings of a major reversal, but the Speculative Sentiment Index has now entered its third week with a net positive reading. On the other hand, while we hadn’t even seen a net positive reading since the final quarter of 2006 until recently, the positioning report is still very mild. With a ratio of 1.10, only 52% of the retail traders polled are long. This compares to a 1.31 reading last week when 57% of traders were betting on a rise in the euro. Looking back to 2005, during the last significant EURUSD downswing, the sentiment gauge was frequently above 2.00. Looking at the indicator’s statistics, retail traders have been more apt to follow the recent pull back in EURUSD. Long positions dropped 10% since yesterday though they were only 5.1% weaker than last Thursday. At the same time, short positions grew 11.3% from Wednesday and are 8.9% stronger on the week. Open interest has been relatively steady, falling 1.1% over the week and holding 2.6% above its monthly average. The SSI points to further EURUSD downside; but until a trend is established, the reading will likely remain weak.