Euro Forecast to Rally Further vs USD
EURUSD – Trading crowds turned aggressively short the Euro against the US Dollar when the pair traded near the 1.3350 mark, giving contrarian signal that the pair could continue rallying. Indeed, our SSI ratio currently stands at -1.75—showing that the number of traders short outnumber those long by 1.75 to 1. Yesterday the same ratio was at -1.48; we saw short positions increase 5.2 percent overnight and 37 percent since last week. All the while, long positions are 10.5 percent lower than they were yesterday and 16.2 percent below their levels seven days ago.
Given that trading crowds remain heavily net short and continue selling, we see little reason to alter our contrarian calls for further EURUSD strength.
How do we interpret the SSI? Watch an FXCM Expo Presentation that explains the SSI.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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