EUR/USD Ratio: 1.14
Signal: Bearish
EURUSD – It has finally happened. The EURUSD Speculative Sentiment Index flipped to a net positive reading of 1.14. Encouraged by a sharp yet steady drop in the pair below a major rising trend, this momentous shift in positioning offers the first signs of a major reversal after more than two years of a solid bull trend. With nearly 53% percent of traders holding long positions, this reading is still somewhat weak, but no doubt reflects early profit taking on breakout trades and overrun limit and stop orders. Looking at the details, longs have jumped 18.6% since yesterday and are 15.7% higher than they were last Thursday. Short positions on the other hand have dropped 18.4% from Wednesday and are 24.5% weaker than last week. Overall open interest fell a modest 4.4% from last week as stops are triggered, but total positions are actually 2.5% above the monthly average. Though it is still a weak signal, the contrarian SSI points to further EURUSD downside ahead.