Swiss Franc Shows Bullish Outlook
USDCHF – A sudden shift towards crowd USDCHF buying gives contrarian signal that the pair could see fresh lows. Yet we see relatively limited chance of substantial currency moves into the final trading days of 2011.
The ratio of long to short positions in the USDCHF stands at 1.47 as nearly 59% of traders are long. Yesterday, the ratio was at 1.52 as 60% of open positions were long. In detail, long positions are 14.4% lower than yesterday and 47.8% stronger since last week. Short positions are 11.6% lower than yesterday and 35.0% weaker since last week.
The broad shift towards USDCHF buying gives us a contrarian bearish bias. Yet we only forecast USDCHF declines with the clear caveat that major breakdowns seem unlikely into the slow-moving end to the year’s trading.
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--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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