FXCM Speculative Sentiment Index (SSI)
As of September 21, 2006 (10:00 EST, 14:00 GMT)
The ratio of longs to shorts in the EUR/USD is 1.04 which is close to parity and within the extreme +/- 3 range. Speculative positions have remained mostly net long for the last two weeks but have recently grew less net long as the currency pair rallies trough 1.27. Total positioning is 7 percent weaker with short positions up by 43 percent and long positions down by 30 percent. Looking ahead, the bias is for dollar strength but some vigilance is recommended because an extraordinarily increase in short positioning often means that many stop loss orders are building up above the current price level.
The ratio of longs to shorts in the GBP/USD is -3.91, which is above the extreme +/- 3 range. The ratio has remained mostly net short for the past week, coinciding with another 172 pips gain in the sterling. Long positions are down by 44 percent while short positions are up by 57 percent bringing total positioning 14 percent higher. Looking ahead, as the ratio grows more net short sterling strength is likely.
The ratio of longs to shorts in USD/CHF is 1.32, which is within the extreme +/- 3 range. The ratio continues to flip back and forth ratio but has remained mostly net long since Tuesday. Total positioning is 2.5 percent weaker as short positions fall by 27 percent and long positions rise by 31 percent. The ratio does not confirm the EUR/USD signal.
The ratio of longs to shorts in USD/JPY is -1.25, which is within the extreme +/- 3 range. Total positioning is 14 percent weaker with short positions down by 28 percent and long positions up by 15 percent. Rising prices with a big fall in net positioning is normally bearish because short covering and not fundamental reasons are fueling the rising trend. Frequently when the short covering has ended prices decline. Looking ahead, speculative positioning continues to favors dollar longs.
