EUR/USD - Positioning Grows Less Net Short On Profit Taking
USD/JPY - Open Positions Rise by 15 Percent on Strong Appetite for Carry
GBP/USD - Sterling Positioning Flipped To Positive Territory Signaling More Dollar Gains
USD/CHF - Short Positions Are 46% Stronger Since Last week
USD/CAD - Long Positioning Remains Extreme
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 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.
EURUSD - This week, the ratio of long to short positions in the EURUSD stands at -1.45 as nearly 59% of traders are short. Yesterday, the ratio was at -1.50 as 60% of open positions were short. In detail, long positions are 2.6% higher than yesterday and 18.1% stronger since last week. Short positions are 1.1% lower than yesterday and 4.6% weaker since last week. Open interest is 0.4% stronger than yesterday and 20% below its monthly average. In the past the SSI has been working the best as a contrarian indicator and in the week ahead the ratio signals more EURUSD gains.
GBPUSD - Today, the ratio of long to short positions in the GBPUSD stands at 1.15 as nearly 54% of traders are long. Yesterday, the ratio was at -1.50 as 60% of open positions were short. In detail, long positions are 37.0% higher than yesterday and 51.4% stronger since last week. Short positions are 20.7% lower than yesterday and 10.0% weaker since last week. Open interest is 2.4% stronger than yesterday and 21.9% below its monthly average. The SSI signals more GBPUSD losses.
USDCHF - Today, the ratio of long to short positions in the USDCHF stands at 2.05 as nearly 67% of traders is long. Yesterday, the ratio was at 1.99 as 67% of open positions were long. In detail, long positions are 4.1% higher than yesterday and 0.3% stronger since last week. Short positions are 1.3% higher than yesterday and 46% stronger since last week. Open interest is 3.1% stronger than yesterday and 32.3% below its monthly average. The SSI signals more USDCHF losses.
USDJPY - Today, the ratio of long to short positions in the USDJPY stands at -1.80 as nearly 64% of traders are short. Yesterday, the ratio was at -1.38 as 58% of open positions were short. In detail, long positions are 16.6% lower than yesterday and 5.7% weaker since last week. Short positions are 9.0% higher than yesterday and 1.6% weaker since last week. Open interest is 1.8% weaker than yesterday and 32.0% below its monthly average. The SSI signals more USDJPY gains.
USDCAD - Today, the ratio of long to short positions in the USDCAD stands at 4.27 as nearly 81% of traders is long. Yesterday, the ratio was at 4.53 as 82% of open positions were long. In detail, long positions are 3.9% lower than yesterday and 0.0% stronger since last week. Short positions are 1.9% higher than yesterday and 43.5% stronger since last week. Open interest is 2.9% weaker than yesterday and 12.6% below its monthly average. The SSI signals more USDCAD losses.
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