EURUSD – Sharp declines in the Euro/US Dollar have been met by equally aggressive buying, giving us contrarian signal that the EUR/USD may continue its decline. The ratio of long to short positions in the EURUSD stands at 1.44 as nearly 59% of traders are long. Yesterday, the ratio was at 1.30 as 56% of open positions were long. Long positions gained 15.6% overnight, and they are 35.1% stronger since last week. By comparison, short positions are 4.2% higher than yesterday and 10.0% stronger since last week. The SSI is a contrarian indicator and signals more EURUSD losses. Our sentiment-based forex trading signals are accordingly short the Euro/US dollar through current price action.
USDJPY – Our contrarian forex trading strategies continue to sell the US Dollar/Japanese Yen currency pair, as forex trading crowds remain very bullish the USD/JPY. In fact, the ratio of long to short positions stands at 1.49 as 60 percent of traders are currently long. A 33 percent overnight jump in long positions signals that sentiment has become increasingly one-sided. Yet short positions are 19.3 percent higher—moderating our bias. The SSI is a contrarian indicator and signals more USDJPY losses, but we would ideally see more aggressive USD/JPY buying to forcefully call for subsequent declines.
GBPUSD – Forex positioning has taken a sharp turn in the British Pound/US Dollar pair, and our sentiment-based forex trading strategies recently flipped from long to short the GBP/USD. The SSI ratio is currently at 1.00 as positioning remains neutral. This represents a sharp shift from yesterday, when 58 percent of open positions were short the GBP/USD. Long positions have jumped 31.5 percent—giving us a clear contrarian bearish bias on the GBP/USD. Short positions are by comparison 6.4 percent lower than yesterday yet 60.2 percent stronger since last week. On balance this given reason to believe that the British Pound may continue its slide against the US Dollar.
USDCHF – Our forex positioning indicator recently flipped its bias on the US Dollar/Swiss Franc currency pair, as traders have now turned net long the USD/CHF. Indeed, the ratio of long to short positions in the USDCHF stands at 1.19 as nearly 54 percent of traders are long. Yesterday, the ratio was at -1.31 as 57 percent of open positions were short. In detail, long positions are 28.1% higher than yesterday and 29.1% stronger since last week. Short positions are 17.7% lower than yesterday and 7.6% stronger since last week. Open interest is 2.1% stronger than yesterday and 21.3% below its monthly average. The SSI is a contrarian indicator and signals more USDCHF losses. As a result, our forex trading signals are currently short the USD/CHF.

USDCAD – The ratio of long to short positions in the USDCAD stands at -1.04 as nearly 51 percent of traders are short. Yesterday, the ratio was at 1.27 as 56 percent of open positions were long. In detail, long positions are 4.7 percent lower than yesterday and 4.9 percent weaker since last week. Short positions are 26.1 percent higher than yesterday and 26.8% stronger since last week. Open interest is 8.9% stronger than yesterday and 23.9% below its monthly average. The SSI is a contrarian indicator and signals more USDCAD gains. Tell us and other traders what you think in our forex forum.



How do we 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.

0 comments

Post a Comment

Followers

MY BLOGLOG

YOUR IP ADRESS

what is my ip address?

visitors