Latest Release Dated 08/24/06 (10:00 GMT)
EUR/USD EUR/USD Short Positions at Lowest Level Since February
GBP/USD GBP/USD to Take Another Stab at 1.90
USD/CHF Remains Under Pressure and Signals Limited Losses in EUR/USD
USD/JPY More Gains Expected in USD/JPY
As of August 24, 2006 (5:00 EST, 10:00 GMT)
The ratio of longs to shorts in the EUR/USD is 1.41, which is within the extreme +/- 3 range. The ratio has been flipping back and forth over the past few weeks, coinciding with the relatively tight 250 pip range that the currency pair has been fluctuating in. After a 20 percent decline in total positions the week prior, this past week we saw another 2.8 percent drop. August is typically a month of thin or low volume trading. Short positions are down by 35.9 percent to the lowest level since February while long positions increased by 53.5 percent. The positive nature of the EUR/USD ratio signals that weakness is more likely than strength, with a possible move below 1.2750. However, losses should be limited as the USD/CHF ratio remains net long. The 1.27-1.29 trading range should continue to hold until Labor Day.
The ratio of longs to shorts in the GBP/USD is -2.36, which is within the extreme +/- 3 range. Speculative positions have remained mostly net short for the past month which has coincided with the 500 pip rally that we have seen in the GBP/USD during that same time frame. Over the past week, the currency pair appreciated another 100 points in quiet trading. Looking ahead, more gains are expected as the currency looks set to take another stab at the 1.90 level. Total positions are basically unchanged, up by a modest 1.3 percent. Long positions have increased 10.4 percent while short positions are down by 2.1 percent.
The ratio of longs to shorts in USD/CHF is 1.25, which is within the extreme +/- 3 range. The ratio has remained net long for 9 weeks now as the currency pair remains capped below the 100-day SMA. Total positions have increased 18.4 percent, led primarily by a 50 percent increase in short positions and a comparatively mild 1.3 percent increase in long positions. Looking ahead, the USD/CHF ratio continues to forecast more dollar weakness and limited gains in the EUR/USD.
The ratio of longs to shorts in USD/JPY is -1.69, which is within the extreme +/- 3 range and virtually at parity. The USD/JPY ratio has remained mostly net short for the past week, coinciding with a mild rally in the currency pair. More gains are expected as the ratio grows more net short. Traders are returning to the market with total positions up by 11 percent. Short positions are 34 percent higher while long positions are lower by 14.3 percent.
