Euro Forecast Turns Bearish as it Breaks $1.13
Receive the Weekly Speculative Sentiment Index report via PDF via David’s e-mail distribution list.
EURUSD –The ratio of long to short positions in the EURUSD stands at 1.09 as 52% of traders are long. Yesterday the ratio was -1.39; 42% of open positions were long. Long positions are 16.4% higher than yesterday and 21.9% above levels seen last week. Short positions are 23.4% lower than yesterday and 28.8% below levels seen last week. Open interest is 6.7% lower than yesterday and 5.4% below its monthly average. We use our SSI as a contrarian indicator to price action, and the fact that the majority of traders are long gives signal that the EURUSD may continue lower. The trading crowd has flipped from net-short to net-long from yesterday and last week. The combination of current sentiment and recent changes gives a further bearish trading bias.
A key caveat is that Euro volatility prices have tumbled near multi-month lows; a lack of volatility could keep the pair above its 12-year low near $1.11.
See next currency section: GBPUSD - Sharp Shift in Sentiment Warns of British Pound Weakness
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
Automate our SSI-based trading strategies via Mirror Trader free of charge
To receive the Speculative Sentiment Index and other reports from this author via e-mail, sign up for his distribution list via this link.
Contact David via
Twitter at http://www.twitter.com/DRodriguezFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.