EURUSD - Traders are short euros but the SSI gives us a strong signal to buy EURUSD

GBPUSD - Long Positions are up by nearly 20 percent since last week

USDJPY - Despite last week?s carry unwind, almost 67% of traders remain long USDJPY

USDCHF - Positions outstanding fall by 30 percent

USDCAD - The ratio of long to short positions in the USDCAD stands at 3.91

EURUSD - According to the FXCM dealing desk, the ratio of long to short positions in the EURUSD stands at -1.25 as nearly 56% of traders are short. In detail, long positions are 6.5% higher than yesterday and 4.8% weaker since last week. Short positions are 4.6% lower than yesterday but 6.3% stronger since last week. In the past, when traders were short and selling more, the EURUSD has rallied in the following days and as a result the SSI gives us a STRONG SIGNAL TO BUY EURUSD.

GBPUSD - The ratio of long to short positions in the GBPUSD stands at 1.19 as nearly 54% of traders are long. Yesterday, the ratio was at 1.37 as 58% of open positions were long. In detail, long positions are 2.0% higher than yesterday and 20.4% stronger since last week. Short positions are 17.5% higher than yesterday and 51.3% weaker since last week. Open interest is 8.5% stronger than yesterday and 27.6% below its monthly average. The SSI is a contrarian indicator and signals more GBPUSD losses.

USDJPY - The ratio of long to short positions in the USDJPY stands at 2.06 as nearly 67% of traders are long. Yesterday, the ratio was at 2.47 as 71% of open positions were long. In detail, long positions are 7.8% higher than yesterday and 4.4% weaker since last week. Short positions are 29.2% higher than yesterday and 6.2% weaker since last week. Open interest is 14.0% stronger than yesterday and 13.8% below its monthly average. The SSI is a contrarian indicator and signals more USDJPY losses.

USDCHF - The ratio of long to short positions in the USDCHF stands at 2.37 as nearly 70% of traders are long. Yesterday, the ratio was at 2.50 as 71% of open positions were long. In detail, long positions are 15.4% higher than yesterday and 40.3% weaker since last week. Short positions are 21.8% higher than yesterday and 20.6% stronger since last week. Open interest is 17.2% stronger than yesterday and 26.2% below its monthly average. The SSI is a contrarian indicator and signals more USDCHF losses.

USDCAD - The ratio of long to short positions in the USDCAD stands at 3.91 as nearly 80% of traders are long. Yesterday, the ratio was at 3.42 as 77% of open positions were long. In detail, long positions are 5.3% higher than yesterday and 13.8% stronger since last week. Short positions are 8.1% lower than yesterday and 29.8% weaker since last week. Open interest is 2.2% stronger than yesterday and 7.6% below its monthly average. The SSI is a contrarian indicator and signals more USDCAD losses.

How to Interpret the SSI? 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 donâ€™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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