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The ratio of long to short positions in the EURUSD stands at -1.22 as nearly 55% of traders are short, according to the FXCM SSI which measures the positioning of thousands of retail traders. However, the higher the number of short orders in a bear market the more dangerous is to take additional short positions because many traders are leaving their stop losses just above the current price action. The SSI is a contrarian indicator and signals EUR/USD gains going forward.

FXCM Speculative Sentiment Index (SSI)

How to Interpret the SSI? The FXCM SSI is based on proprietary customer flow information and is designed to recognize price trend breaks and reversals in the four most popularly traded currency pairs. The absolute number of the ratio itself represents the amount by which longs exceed shorts or vice versa. For example if the EURUSD ratio is 2.55, long customer orders exceed short orders by a ratio of 2.55 to 1. Conceptually similar to contrarian analyses using the CFTC IMM open position data or COT Report, the SSI provides an alternative approach that is both more timely and accurate in forecasting currency price movement. The SSI is a contrarian indicator that tells you how the market is weighted and where the trend may head. More long positions don't necessary suggest more confidence in the direction of the current trend. In general, when traders start having adverse movements against their position, many tend to increase the size of their position with the purpose to average down their entry price in one last attempt to recover from previous losses. However, the higher the number of short orders in a bull market the more dangerous is to take additional shorts because many of those traders who just entered the markets are also leaving their protective stop losses just above the current price action.

Forex Positioning in the EURUSD

EURUSD - The ratio of long to short positions in the EURUSD stands at -1.22 as nearly 55% of traders are short, according to the FXCM SSI which measures the positioning of thousands of retail traders. In detail, short positions are 8.3% higher than yesterday and 33.1% stronger since last week. However, the higher the number of short orders in a bear market the more dangerous is to take additional shorts because many traders are also leaving their stop losses just above the current price action. The SSI is a contrarian indicator and signals EURUSD gains going forward.

Forex Positioning in the USDJPY

USDJPY - The ratio of long to short positions in the USDJPY stands at 1.33 as nearly 57% of traders are long. Yesterday, the ratio was at 1.36 as 58% of open positions were long. In detail, long positions are 1.4% lower than yesterday and 9.3% stronger since last week. Short positions are 1.0% higher than yesterday and 18.1% weaker since last week. Open interest is 0.4% weaker than yesterday and 11.0% below its monthly average. The SSI is a contrarian indicator and signals more USDJPY losses.

Forex Positioning in the GBPUSD

GBPUSD - The ratio of long to short positions in the GBPUSD stands at -1.42 as nearly 59% of traders are short. Yesterday, the ratio was at -1.36 as 58% of open positions were short. In detail, long positions are 6.0% higher than yesterday and 14.1% weaker since last week. Short positions are 11.2% higher than yesterday and 4.8% weaker since last week. Open interest is 9.0% stronger than yesterday and 13.7% below its monthly average.

Forex Positioning in the USDCHF

USDCHF - The ratio of long to short positions in the USDCHF stands at -1.33 as nearly 57% of traders are short. Yesterday, the ratio was at -1.26 as 56% of open positions were short. In detail, long positions are 5.5% lower than yesterday and 11.8% stronger since last week. Short positions are 0.2% higher than yesterday and 3.4% weaker since last week. Open interest is 2.4% weaker than yesterday and 12.4% below its monthly average. The SSI is a contrarian indicator and signals more USDCHF gains.

Forex Positioning in the USDCAD

USDCAD - The ratio of long to short positions in the USDCAD stands at 1.79 as nearly 64% of traders are long. Yesterday, the ratio was at 1.88 as 65% of open positions were long. In detail, long positions are 1.1% lower than yesterday and 1.2% weaker since last week. Short positions are 4.0% higher than yesterday and 5.2% weaker since last week. Open interest is 0.7% stronger than yesterday and 22.2% below its monthly average.

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