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USDCAD SSI Flips For The First Time In A Year And A Half

Thursday, 12 June 2008 18:40:41 GMT

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Written by John Kicklighter, Currency Analyst and David Song, DailyFX.com

USD/CAD Ratio: 1.06
Signal: Bearish

Currency Last Week Present* % Long % Change in Positions Outstanding Signal
USDCAD 1.22 1.06 51% -0.89% Bearish

SSI7_6-12

USDCAD – It has finally happened. USDCAD’s Speculative Sentiment ratio finally flipped to a net negative reading for the first time since November of 2006. The flip occurred early this morning; and though the sentiment gauge had not maintained the negative figure into the afternoon, the milestone was nonetheless marked. Standing at 1.06 during the US session, the sentiment gauge reflected a modest skew with only 51% of traders holding long positions. This relative extreme for the long-positive USDCAD sentiment gauge comes as underlying price action has tested a range high of 1.0350 for the third time in five months, suggesting yet another dollar-favorable breakout may be developing. The indicator’s details show that, despite the ratio’s move towards a flip, there have been only modest changes to positioning. Long positions have eased 0.4% since yesterday and are 8.4% lower on the week. Short positions were unchanged since yesterday and 8.6% higher from last Thursday. Despite the retail communities proclivity for range trading, open interest is actually 3.2% lower on the week and 6.7% below the monthly average.
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