Rising Long Interest Threatens A Euro Breakdown
Retail sentiment has once again shifted; and this time, speculative traders are positioning for the EURUSD’s long-term trend to remain intact. Over the past week, the Speculative Sentiment Index ratio jumped to its highest reading since last October - though this shouldn’t be too surprising considering the retail sector’s affinity for prominent technical levels. Today, the pair’s ratio stands at -1.59 with nearly 61% of the market group holding a long position. No doubt, such a skew arises from spot’s proximity to a very clear rising trendline from last August’s swing low as the sentiment gauge reported a similar extreme in mid-June. What’s more, major event risk in a GDP report, NFPs and next week’s FOMC rate decision is likely keeping speculators cautious before the potential jump in volatility. This is certainly what the report’s details suggest. Long positions have grown only 0.6% from yesterday but are up 10.1% on the week. From the other side of the market, shorts were relatively unchanged with a 0.3% dip from yesterday and 1.1% pickup on the week. Overall though, open interest has grown 6.6% from the same period last week and is 11.4% above the monthly average.
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08-03-2008, 09:20 PM
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