EUR/USD Ratio: 1.25 Signal: Bearish
EURUSD – Last week’s FXCM forex positioning report proved exactly accurate in forecasting a EURUSD breakdown, as the ratio of traders long to short the euro reached its most extreme in two years—a perfectly timed contrarian trading signal. Since then, ratio of long to short positions in the EURUSD shrunk to a much more neutral1.25 as nearly 56% of traders are currently long. Such a moderation in forex trader buying pressure coincided with a similar slowdown in Euro losses, and we may have to wait until positioning once again grows extreme to expect any big moves. Long positions are still 146.9 percent higher than the beginning of last week, but they nonetheless continue to drop and fell 9.7 percent overnight. The EURUSD SSI currently gives us a modestly bearish bias, but a relatively neutral SSI ratio suggests that we may see Rangebound price action through short-term forex trading. View our Euro Technical Outlook for more insight.