Euro Rally Likely to Continue Post EU Summit
EURUSD – Trading crowds turned aggressively short the Euro against the US Dollar when the pair traded near the 1.3350 mark and continue to remain short, giving contrarian signal that the pair may continue its advance. The ratio of long to short positions in the EURUSD stands at -1.84 as approximately 65% of traders are short. Long interest fell 6.4 percent overnight and is flat since last week. All the while, short interest is a modest 2.8 percent below yesterday’s levels yet 5 percent higher week-over-week.
We have most recently seen traders pull back their short positions as the Euro itself trades off of its highs. Yet as long as the SSI ratio remains negative we will maintain our contrarian bullish bias and call for further 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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