EURUSD-Forex Trading Indicator Accurately Forecasts Euro Declines

EURUSD – We forecast that the Euro would fall against the US dollar, as increasingly net-long positions in the EURUSD gave contrarian signal to sell the currency pair. The ratio of long to short positions in the EURUSD now stands at 1.21 as nearly 55% of traders are long. A broader drop in open interest suggests that the strength of the SSI signal is weaker, but we do note that traders grew increasingly net-long overnight; yesterday, the ratio was at 1.09 as 52% of open positions were long.

USDJPY-Japanese Yen Likely to Gain as Currency Trading Crowds Buy USDJPY

USDJPY – We forecast US dollar losses against the Japanese Yen, as we see that currency trading crowds continue to buy dips in the USDJPY. Our SSI indicator is almost always a contrarian indicator; increasingly one-sided sentiment in a given currency pair often gives signal that it will likely move in the opposite direction. That said, long positions in the USDJPY outnumber shorts at 1.52:1, as nearly 60% of traders are long. Yesterday, the ratio was at 1.14 as 53% of open positions were long. When the forex crowd is long the USDJPY and continues buying, this gives us a fairly clear signal to sell the US Dollar versus the Japanese Yen.

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