EURUSD – Euro Short-term Outlook Neutral vs US Dollar
GBPUSD – British Pound Forecast to Fall Against Dollar
USDJPY – Japanese Yen Forecast to Gain Further against USD
USDCHF – Swiss Franc Trading Bias is Unclear
USDCAD – Canadian Dollar Outlook mixed against USD
While the SSI is available once a week on DailyFX.com, you can receive SSI readings twice a day in DailyFX Plus Forex Intraday Trading Signals
Forex trading crowds have aggressively bought into British Pound Rallies and sold into Japanese Yen strength—giving our sentiment-based strategies clear signal to go short the GBPUSD and USDJPY. Indeed, the vast majority of small speculators remain heavily net-long both currency pairs through time of writing. Sentiment-based forecasts for other US Dollar pairs are considerably less clear, and it seems that traders remain focused on the GBP and JPY. Open interest on the GBPJPY is now almost 40 percent against its medium term average, and our trading strategies remain aggressively short.
Historical Charts of Speculative Forex Trading Positioning
EURUSD – Forex trading crowds remain net-short the Euro/US Dollar, with the ratio of long to short positions in the EURUSD at -1.27 as nearly 56% of traders are short. Yesterday, the ratio was at -1.16 as 54% of open positions were short. In detail, long positions are 2.3% lower than yesterday and 10.4% stronger since last week. Short positions are 6.9% higher than yesterday and 6.9% weaker since last week. Normally the net-short crowd bias would give us contrarian signal to go long the EURUSD, but we would ideally wait for more one-sided crowd sentiment before taking an aggressive trading bias. Our SSI-based trading signals are accordingly flat the EURUSD.
GBPUSD – Our sentiment-based trading strategies remain aggressively short the British Pound against the US Dollar, as crowd sentiment suggests further losses are likely. The ratio of long to short positions in the GBPUSD stands at 1.86 as nearly 65% of traders are long. Yesterday, the ratio was at 1.87 as 65% of open positions were long. In detail, long positions are 4.9% higher than yesterday and an impressive 43.5% stronger since last week. Short positions are 5.3% higher than yesterday and 13.6% weaker since last week. The SSI is a contrarian indicator and signals further GBPUSD losses.
USDJPY – Our sentiment-based forex trading strategies remain aggressively short the US Dollar against the Japanese Yen on heavily one-sided crowd sentiment. The ratio of long to short positions in the USDJPY stands at 2.88 as an impressive 74% of traders are long. Yesterday, the ratio was at 2.42 as 71% of open positions were long. In detail, long positions are 13.9% higher than yesterday and 6.5% stronger since last week. Short positions are 4.2% lower than yesterday and 0.6% weaker since last week. Open interest is 8.6% stronger than yesterday and 17.8% above its monthly average. The SSI is a contrarian indicator and signals further USDJPY losses.
USDCHF – Our sentiment-based USDCHF bias is currently unclear, with sharp shifts in positioning giving mixed outlook on short-term price action. The ratio of long to short positions in the USDCHF stands at 2.44 as nearly 71% of traders are long. We would normally take a contrarian bearish bias on such one-sided long positioning, but it serves to note that long positions are 19% lower than last week while short positions have gained 37% in the same stretch. One of our sentiment-based strategies remains short the USDCHF on the extremely net-long bias, but another may actually go long on the continued shift away from long positioning. Such indecision leaves our bias summarily unclear.
USDCAD – Our forex sentiment-based US Dollar/Canadian Dollar bias is currently unclear, as the recent shift in sentiment leaves one SSI-based strategy long while another remains short. The ratio of long to short positions in the USDCAD stands at 1.86 as nearly 65% of traders are long. In detail, long positions are 3.3% higher than yesterday and 11.2% weaker since last week. Short positions are 11.5% lower than yesterday and 19.0% stronger since last week. The aggressively net-long SSI ratio gives a contrarian bearish bias, but the more recent shift towards short positions offsets our bearish forecast and effectively leaves us flat the USDCAD.
GBPJPY – Our forex sentiment-based trading strategies remain aggressively short the British Pound against the Japanese Yen on one-sided crowd positioning. The ratio of long to short positions in the GBPJPY stands at 2.09 as nearly 68% of traders are long. Yesterday, the ratio was at 2.10 as 68% of open positions were long. In detail, long positions are 0.4% higher than yesterday and an impressive 59.1% stronger since last week. Short positions are 1.0% higher than yesterday and 0.3% weaker since last week. Open interest is 0.6% stronger than yesterday and 35.9% above its monthly average. The SSI is a contrarian indicator, and three of our forex trading systems are accordingly short the GBPJPY.
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Have any further questions about the SSI and forex positioning data? Ask the author David Rodríguez on our forex forum.
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