Latest Release Dated 09/07/06 (10:00 GMT)
· EUR/USD Ratio Flips to Net Long, the bias is for more weakness in the EUR/USD
· GBP/USD SSI Continues to Call for More Gains in GBP/USD
· USD/CHF Ratio not confirming the EUR/USD signal
· USD/JPY More gains could be limited as the ratio grows less net short.
The ratio of longs to shorts in the EUR/USD is 1.30, which is within the extreme +/- 3 range. The ratio flipped to net long on Tuesday ahead of a 90 pips fall in the EUR/USD. Total positioning is up by 21.9 percent as long positions rise by 38.3 percent and short positions increase by 5.5 percent. Looking ahead, more euro losses will be expected if the ratio grows more net long but with the USD/CHF ratio not confirming the EUR/USD signal, further dollar gains could be limited.
The ratio of longs to shorts in the GBP/USD is -1.39, which is within the extreme +/- 3 range. Speculative positions have remained mostly net short for the past month but recently we had less extreme values and a turn is likely. Short positions are down by 36 percent while long positions are up by 78 percent bringing total positioning 12.9 percent lower. Looking ahead, the net balance of positions still points to more pound gains and continued dollar weakness.
The ratio of longs to shorts in USD/CHF is 1.32, which is within the extreme +/- 3 range. We have seen little meaningful price action in the currency pair and the USD/CHFY ratio has remained mostly net long for the past three weeks. Total positions have fallen by 13% with short positions up by 15 percent but long positions down by 26 percent. The USD/CHF ratio doesnt confirm the downside bias in the EUR/USD.
The ratio of longs to shorts in USD/JPY is -1.25, which is within the extreme +/- 3 range and close to at parity. The ratio flipped from net long back to net short on Wednesday and has remained there in the following days. Total positioning is down by 12.5 percent as long positions rise by 14.4 percent and short positions fall by 26.3 percent. More gains are expected but could be limited as the ratio grows less net short.
