EUR/USD Ratio: 1.29 Signal: Bearish
EURUSD – After two week’s of the EURUSD’s Speculative Sentiment Index holding below parity, retail traders once again find themselves net long euros. This rebound in positioning comes in conjunction with spot’s failure to retest record highs around 1.60 and the subsequent 300-plus point sell off from the monthly high set earlier this week. The lower highs in spot and volatility in retail positioning are both characteristic signs of a market that is turning from a trend to consolidation and potentially a reversal. However, a SSI ratio of 1.29 is still far from extreme by historical standards; and therefore further flips from the sentiment gauge are possible. The considerable trading activity seen among retailers over the past week supports this theory. Long positions have grown 11.4% from yesterday and are 24.8% above last week’s levels. Despite the euro’s steep selloff over the last few days, shorts have been culled 6% from Wednesday and are 9.2% weaker than last week. It is also noteworthy that open interest is 6.8% higher than last week and 9.2% above the monthly average - indicating that retail traders are likely growing more confident in range conditions.