- EUR/USD Sentiment Index Calls For Dollar Strength
- GBP/USD Traders Flip To Net short
- USD/CHF Market Balanced At Parity
- USD/JPY Carry Traders fight back
- USD/CAD Open orders fall by 21.9 percent
**Twice a day SSI can be found on FXCMTR under Intraday Analytics
Historical Charts of Speculative Positioning
EURUSD - The ratio of longs to shorts is 1.87 as 65% of the currently open orders are long. The ratio flipped to net long on September 21st when the pair was trading at 1.2830 and has remained mostly net long for the past four weeks coinciding with a 270 pips plunge in the currency pair. Today, long orders are 10.1% lower than yesterday and 6.6% weaker since last week. Short orders are 32.0% higher than yesterday and 20.2% stronger since last week. Open interest is 1.1% stronger than yesterday and 8.5% above its monthly average. Looking ahead, as the ratio grows more net long odds are for more EUR/USD weakness.
GBPUSD - The ratio of longs to shorts is -1.09 as 52.2% of the currently open orders are short. The sterling ratio flipped to net short on October 17th ahead of a 171 pips rally from 1. 8522 to 1.8693. Today, long orders are 7.8% lower than yesterday and 22.1% weaker since last week. Short orders are 2.6% higher than yesterday and 43.1% stronger since last week. Open interest is 2.7% weaker than yesterday and 3.3% above its monthly average. Looking ahead, the SSI signals GBPUSD strength and if we combine this information with the EUR/USD ratio, EURGBP losses are also expected.
USDCHF - The ratio of longs to shorts is virtually at parity as 50% of the currently open orders are long. Long orders are 31.9% higher than yesterday and 40.5% stronger since last week. Short orders are 13.6% lower than yesterday and 25.6% weaker since last week. Open interest is 4.4% stronger than yesterday and 7.1% above its monthly average. Looking ahead, with the ratio balanced at parity the signal is unclear.
USDJPY - The ratio of longs to shorts is -2.27 as 69.5% of the currently open orders are short. The ratio flipped to net short on June the 7th and has remained mostly net short since then, coinciding with a gigantic 800 pips appreciation in the pair. Today, long orders are 12.1% higher than yesterday and 55.1% stronger since last week. Short orders are 9.7% lower than yesterday and 33.6% weaker since last week. Open interest is 4.0% weaker than yesterday and 1.2% below its monthly average. Looking ahead, the SSI signals USDJPY strength.
USDCAD - The ratio of longs to shorts is 1.61 as 61.7% of the currently open orders are long. Long orders are 4.0% higher than yesterday and 12.7% stronger since last week. Short orders are 2.1% lower than yesterday and 2.9% stronger since last week. Open interest is 1.6% stronger than yesterday and 6.6% above its monthly average. Looking ahead, the SSI signals USDCAD weakness because an increase in net positioning often signals selling determination and the larger the change in open interest the more we should expect the existing down trend to continue rather than reverse.
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. 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. If the EURUSD ratio is -3.00 short customer orders in the EURUSD exceed long orders by a ratio of 3 to 1. A negative number indicates that traders are net short while a positive number indicates that traders are net long. 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 losses they tend to increase their position in a nervous attempt to recover from previous losses. They end up losing their courage and are normally taken out by their protective stops.
