Forex weekly analysis

Forex trading sentiment remains at clear extremes, with the vast majority of retail traders long the US Dollar versus the Euro, Japanese Yen, Swiss Franc, and Canadian Dollar. The clear and noteworthy exception is the British Pound; given fairly dramatic weakness, trading crowds have poured into GBP-long positions. Our experience has shown that sentiment extremes typically produce contrarian moves. That is to say, if the vast majority of small FX speculators are long the US Dollar, the currency has often declined. Read below for more in-depth discussions on various US Dollar pairs.

Historical Charts of Speculative Forex Trading Positioning

EURUSD – The ratio of long to short positions in the EURUSD stands at -1.98 as nearly 66% of traders are short. Yesterday, the ratio was at -1.65 as 62% of open positions were short. In detail, long positions are 12.3% lower than yesterday and 17.4% stronger since last week. Short positions are 5.1% higher than yesterday and 12.3% weaker since last week. Open interest is 1.5% weaker than yesterday and 6.4% above its monthly average. The SSI is a contrarian indicator and signals more EURUSD gains.

GBPUSD – The ratio of long to short positions in the GBPUSD stands at 2.20 as nearly 69% of traders are long. Yesterday, the ratio was at 1.24 as 55% of open positions were long. In detail, long positions are 34.5% higher than yesterday and 30.4% stronger since last week. Short positions are 23.9% lower than yesterday and 20.9% weaker since last week. Open interest is 8.5% stronger than yesterday and 3.9% above its monthly average. The SSI is a contrarian indicator and signals more GBPUSD losses.

USDJPY – The ratio of long to short positions in the USDJPY stands at 3.41 as nearly 77% of traders are long. Yesterday, the ratio was at 2.91 as 74% of open positions were long. In detail, long positions are 6.0% higher than yesterday and 2.9% weaker since last week. Short positions are 9.4% lower than yesterday and 12.3% weaker since last week. Open interest is 2.1% stronger than yesterday and 2.8% above its monthly average. The SSI is a contrarian indicator and signals more USDJPY losses.

USDCHF – The ratio of long to short positions in the USDCHF stands at 4.38 as nearly 81% of traders are long. Yesterday, the ratio was at 3.62 as 78% of open positions were long. In detail, long positions are 1.7% higher than yesterday and 11.8% weaker since last week. Short positions are 15.8% lower than yesterday and 0.6% weaker since last week. Open interest is 2.1% weaker than yesterday and 18.1% above its monthly average. The SSI is a contrarian indicator and signals more USDCHF losses.

USDCAD – The ratio of long to short positions in the USDCAD stands at 2.32 as nearly 70% of traders are long. Yesterday, the ratio was at 2.40 as 71% of open positions were long. In detail, long positions are 4.3% lower than yesterday and 27.3% weaker since last week. Short positions are 0.8% lower than yesterday and 10.7% stronger since last week. Open interest is 3.3% weaker than yesterday and 1.8% below its monthly average. The SSI is a contrarian indicator and signals more USDCAD losses.

GBPJPY – The ratio of long to short positions in the GBPJPY stands at 3.94 as nearly 80% of traders are long. Yesterday, the ratio was at 2.12 as 68% of open positions were long. In detail, long positions are 28.0% higher than yesterday and 17.3% stronger since last week. Short positions are 31.1% lower than yesterday and 14.3% weaker since last week. Open interest is 9.1% stronger than yesterday and 7.3% above its monthly average. The SSI is a contrarian indicator and signals more GBPJPY losses.