Currencies | Mar 25 2011
– Euro uptrend against US dollar remains intact
– Sentiment on the trade close to extreme levels
By David Rodriguez
EURUSD – Trading crowds have remained fairly net short the Euro against the US Dollar, showing few important signs of relenting and giving contrarian signal to stay long into EURUSD rallies. There is legitimate risk that the pair could have set an important sentiment extreme as the SSI ratio went below -3.00 for the first time since the EURUSD set an important top in November, 2009. Yet sentiment extremes are only clear in retrospect and we hesitate to make strong calls for reversal absent a more material shift in sentiment.
The ratio of long to short positions in the EURUSD stands at -1.85 as nearly 65% of traders are short. Yesterday, the ratio was at -2.03 as 67% of open positions were short. In detail, long positions are 14.2% higher than yesterday and 33.1% stronger since last week. Short positions are 3.9% higher than yesterday and 0.9% stronger since last week. Open interest is 7.3% stronger than yesterday and 1.2% below its monthly average. The net-short ratio gives contrarian signal to buy into EURUSD rallies.
The views expressed are not FNArena's (see our disclaimer).
For real time news and analysis, please visit http://www.dailyfx.com/real_time_news
DailyFX provides forex news on the economic reports and political events that influence the currency market. Learn currency trading with a free practice account and charts from FXCM.
www.dailyfx.com
Disclaimer
Forex Capital Markets is headquartered at Financial Square 32 Old Slip, 10th Floor, New York, NY 10005 USA.
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before you decide to trade the foreign exchange products offered by Forex Capital Markets, LLC, Forex Capital Markets Limited, inclusive of all EU branches, FXCM Asia Limited, or FXCM Australia Limited, any affiliates of aforementioned firms, or other firms under the FXCM group of companies [collectively “FXCM Group”] you should carefully consider your objectives, financial situation, needs and level of experience. If you decide to trade foreign exchange products offered by FXCM Australia Limited you must read and understand the Financial Services Guide and the Product Disclosure Statement. FXCM Group may provide general market information and commentary which is not intended to be investment advice and the content of this email must not be construed as personal advice. By trading, you could sustain a total loss of your deposited funds and therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading in foreign exchange products. Foreign exchange products are only suitable for those customers who fully understand the market risk. FXCM recommends you seek advice from a separate financial advisor.
FXCM Group assumes no liability for errors, inaccuracies or omissions in these materials and does not warrant the accuracy or completeness of the information, text, graphics, links or other items contained within these materials. FXCM Group shall not be liable for any special, indirect, incidental, or consequential damages, including without limitation losses, lost revenues, or lost profits that may result from these materials. This email is not a solicitation to buy or sell currency. All information contained in this e-mail is strictly confidential and is only intended for use by the recipient. All e-mail sent to or from this address will be received by the FXCM corporate e-mail system and is subject to archival and review by someone other than the recipient.”
Technical limitations
If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.
