Retail forex speculators remain aggressively short the US Dollar (ticker: USDOLLAR) against the Swiss Franc, giving us consistent contrarian signal that the pair may trade to fresh highs. It is worth noting that short interest has fallen a noteworthy 21 percent since last week, while long positioning was roughly flat.
Trading crowds first turned net-short USDCHF as the pair crossed above SFr 0.9100 and have remained short with little interruption. We remain bullish USDCHF as a result, but the important decline in short interest warns that the pace of gains may slow.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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