- EUR/USD Ratio of Longs to Shorts Remains Close to Parity
- GBP/USD Sterling Shorts Vulnerable to Stops Cascade
- USD/JPY Open Interest Falls as Carry Traders Take Profits
- USD/CHF Total Open Positions up by 24%
- USD/CAD Sentiment Grows Less Net Long
**Twice a day SSI can be found on FXCMTR under Intraday Analytics
Historical Charts of Speculative Positioning
EURUSD Since December 2006, the U.S. dollar has been appreciating against the euro at the same time that speculative positioning has been growing less net short, which confirms the contrarian momentum of the sentiment index during trending markets. Today, the ratio of longs to shorts is negative 1.16 as 54% of the currently open orders are short. Long orders are 18.8% higher than yesterday and 13.9% stronger since last week. Short orders are 4.4% lower than yesterday and 8.1% stronger since last week. Open interest is 5.4% stronger than yesterday and 6.3% above its monthly average. Looking ahead, the SSI signals EURUSD strength but gains could be limited since the ratio is very close to parity.
How to Interpret the EUR/USD SSI? 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, higher the number of short orders in a bull market 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.
GBPUSD - The sterling positioning ratio flipped to net short in October and has remained mostly net short since then. Today, the ratio of longs to shorts is negative 3.16 as 76% of the currently open orders are short. Long orders are 11% higher than yesterday and 8.6% weaker since last week. Short orders are 8.6% lower than yesterday and 12.6% weaker since last week. Open interest is 4.5% weaker than yesterday and 3.5% below its monthly average. Looking ahead, the SSI signals GBPUSD strength.
USDCHF - The ratio of longs to shorts is 1.80 as 64.3% of the currently open orders are long. Long orders are 2.3% lower than yesterday and 7.9% stronger since last week. Short orders are 2% higher than yesterday and 5% stronger since last week. Open interest is 0.8% weaker than yesterday and 2.2% above its monthly average. Looking ahead, the SSI signals USDCHF weakness and confirms the euro strength against the U.S. dollar.
USDJPY - This week, the number of total positions in the Japanese yen fell by 1.46 percent as many carry traders decided to take profits ahead of the G7 meeting. Additionally, the ratio of longs to shorts is negative 1.49 as 59.9% of the currently open orders are short. Long orders are 3.3% higher than yesterday and 5% stronger since last week. Short orders are 3.3% lower than yesterday and 6.9% weaker since last week. Open interest is 0.8% weaker than yesterday and 5.4% above its monthly average. Looking ahead, the SSI signals USDJPY strength.
USDCAD - The USD/CAD ratio has remained mostly net long since May 2005, when the pair was trading at 1.26 and today the story is not different. The ratio of longs to shorts is 1.71 as 63% of the currently open orders are long. Long orders are 1.1% higher than yesterday and 2.2% stronger since last week. Short orders are 2% lower than yesterday and 3.3% stronger since last week. Open interest is 0.1% weaker than yesterday and 3.0% above its monthly average.
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