Shift in Sentiment Signals US Dollar Weakness Against Swiss Franc

USDCHF - Forex trader sentiment has recently turned bullish the US dollar against the Swiss Franc—giving a clear contrarian signal to sell the USD/CHF pair. In fact, trading crowds had remained net-short the USD/CHF for a nearly-uninterrupted 8-month stretch before flipping their bias through recent price action. The ratio of long to short positions in the USD/CHF stands at a nearly-neutral 1.06, as 51 percent of traders are long. Typically this is not enough of an extreme bias to warrant attention, but the clear shift in positioning does favor USD/CHF weakness. In fact, yesterday’s ratio was at -1.74 as 63% of open positions were short. The SSI is a contrarian indicator and signals more USDCHF losses. Our SSI-based trading signals accordingly sold the USD/CHF at 1.2048 and 1.1949.