EUR/USD Ratio grows less net long
GBP/USD Ratio close to parity
USD/CHF Ratio not confirming the downside bias in the EUR/USD
USD/JPY Ratio grows more net short
USD/CAD Open orders jump 31%
*The SSI is updated twice a day and can be found on FXCMTR under Intraday Analytics
EURUSD - The ratio of longs to shorts is 1.71 as 63% of the currently open orders are long. With the EUR/USD trapped in a tight range the ratio has remained mostly net long for the past two weeks. Today, long orders are 4% lower and short orders are 16% higher than yesterday. Open interest is 3% stronger and 16% above its monthly average. Looking ahead, the EUR/USD SSI is signaling more losses for the currency pair.
GBPUSD - The ratio of longs to shorts is 1.08 as 52% of the currently open orders are long. Today, long orders are 60% higher and short orders are 27% lower than yesterday. Open interest is 1% stronger and 12% above its monthly average. Looking ahead, with the ratio at parity, the outlook is still uncertain.
USDCHF - The ratio of longs to shorts is 1.65 as 62% of the currently open orders are long. Today, long orders are 3% higher and short orders are 20% higher than yesterday. Open interest is 10% stronger and 11% above its monthly average. The USD/CHF ratio does not confirm the downside bias in the EUR/USD.
USDJPY - The ratio of longs to shorts is -2.63 as 72% of the currently open orders are short. Today, long orders are 3% lower and short orders are 13% higher than yesterday. Open interest is 8% stronger and 20% above its monthly average. As the ratio grows more net short the bias is for more dollar gains.
USDCAD - The ratio of longs to shorts is 6.94 as 87% of the currently open orders are long. Today, long orders are 9% higher and short orders are 7% higher than yesterday. Open interest is 9% stronger and 23% above its monthly average. Long positioning remains extreme continuing to call for more losses in USD/CAD.
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. A negative number indicates that traders are net short while a positive number indicates that traders are net long. 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, this means that long customer positions in the EURUSD exceed short positions by a ratio of 2.55 to 1. If the EURUSD ratio is -3.00, this means that short customer positions in the EURUSD exceed long positions by a ratio of 3 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.
