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Forex Indicator Forecasts Short-Term Turn in US Dollar
The SSI sought a EURUSD rally since 1.26 and was signaling a reversal around 1.60. Find our more in the DailyFX Forex Forum
Historical Charts of Speculative Forex Trading Positioning
EURUSD – Extreme forex market choppiness has left sentiment on
the Euro/US Dollar fairly neutral, and the SSI gives relatively few
clues on near-term direction. The ratio of long to short positions in
the EURUSD stands at -1.24 as a mere 55% of traders are short.
Yesterday, the ratio was at 1.12 as 53% of open positions were long. In
detail, long positions are 13.3% lower than yesterday and 21.3% weaker
since last week. Short positions are 19.7% higher than yesterday and
11.7% stronger since last week. The noteworthy overnight gain in short
positions gives us a modestly bullish contrarian bias, but we would
prefer to wait for clear sentiment extremes before taking a firm stance
on the EURUSD.
GBPUSD –Forex positioning in the British Pound/US Dollar
currency pair remains similarly indecisive, and our trading indicator
gives relatively little sign of near-term direction. The ratio of long
to short positions in the GBPUSD stands at -1.17 as nearly 54% of
traders are short. Yesterday, the ratio was at 1.37 as 58% of open
positions were long. In detail, long positions are 19.0% lower than
yesterday and 15.2% weaker since last week. Short positions are 30.5%
higher than yesterday and 4.0% stronger since last week. The sharp jump
in short positions gives us a modestly bullish contrarian bias, and an
SSI-based forex trading strategy has accordingly gone long the pair on the sharp shift in sentiment.
USDJPY – Our forex sentiment indicator has aggressively called
for USDJPY losses through recent trade, but the very recent shift in
positioning has tempered its bearish forecast. The ratio of long to
short positions in the USDJPY stands at 2.63 as nearly 72% of traders
are long. Yesterday, the ratio was at an impressive 4.10 as 80% of open
positions were long. In detail, long positions are 10.1% lower than
yesterday and 17.5% stronger since last week. Short positions are 40.1%
higher than yesterday and 8.4% weaker since last week. A headline SSI
ratio of 2.63:1 gives us a contrarian bearish bias, but the overnight
surge in short positions suggests that the pair may correct higher
before resuming its downtrend. One of our forex trading strategies has accordingly taken profits on its earlier short position.
USDCHF – One-sided forex trader sentiment suggests that the
USDCHF will continue to decline, but a sharp drop in open interest
gives us relatively little faith in said sentiment-based forecast. The
ratio of long to short positions in the USDCHF stands at 2.10 as nearly
68% of traders are long. Yesterday, the ratio was at 1.65 as 62% of
open positions were long. In detail, long positions are 3.4% higher
than yesterday and 8.9% weaker since last week. Short positions are
19.0% lower than yesterday and 18.7% weaker since last week. Open
interest is 5.1% weaker than yesterday and is considerably below recent
peaks. Two of our SSI-based trading systems remain short the USDCHF, but our conviction in said bearish stance is limited on low open interest.
USDCAD – A recent shift in USDCAD sentiment suggests that the
pair may continue to correct lower through short-term trading. The
ratio of long to short positions in the USDCAD stands at 1.14 as nearly
53% of traders are long. This is a noteworthy shift from yesterday when
the ratio was at -1.16 as 54% of open positions were short. In detail,
long positions are 10.1% higher than yesterday and 11.8% stronger since
last week. Short positions are 16.7% lower than yesterday and 26.3%
weaker since last week. The SSI is a contrarian indicator and maintains
a modestly bearish bias on the USDCAD.
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| Category: Currency trading | Added by: forex-market (2009-07-09)
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| Views: 388
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