The reason for the difference is that the code that we created to calculate the SSI signals takes the 'previous' reading to be the level at the close of the trading day. However, when we take the 'current' reading , we calculated it at 5:00 AM EST and 1 PM EST. Therefore, our previous readings are not the same as the current from the previous day.

There have been instances were there has been actual errors in the code, but I haven't noticed it recently. If you see a situation where the previous constantly reads the same 'previous' day after day, it may be due to a bug in the code where it keeps taking the closing SSI value at the end of the previous. If that happens and I don't catch it, just email me (jkicklighter@dailyfx.com) and I'll can debug it.

It's finally happened. The EURUSD SSI ratio has flipped. Considering that the flip happened right when the pair produced a significant break of a major rising trendline, I'm very impressed right now of the accuracy of this contrarian indicator.

Most of the time, I treat the SSI readings as longer-term gauges for general direction. I will watch it for major shifts at the end of the long rallies or declines and consult it when deciding whether I should buy dips on those long-term advances (and take small and quick shorts) or sell rebounds on the long-term declines (and get in and out with small long-side trades).

This has been a pretty good strategy as it has kept me out on the sidelines for USDCAD and GBPUSD since those have had some odd readings since they have been largely range bound (and speculative traders are pretty good range traders). But the USDJPY, USDCHF and EURUSD flips have been good for the reversals we have seen over the past couple of weeks.

I'm still holding with the USDJPY and USDCHF long-side positions, but I'm still cautious on the EURUSD shorts. The SSI reading hasn't charged up to an extreme long yet, so it could easily flip back to net short positions with a EURUSD rebound (proving this drop to be merely a flush to clear a glut of stops in the region).

So: looking for good EURUSD short positions, but still cautious on it.

Any one else take advantage of the EURUSD flip? Any other notable sentiment changes that have offered good trader?

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Anyone know why for the past two days we haven't had reports at 900 GMT???

There was a problem with the website on the sixth, so some of our data was lost. I believe it was up for only 15 minutes. Thankfully we have fixed the problem.

The weekly SSI update is interesting considering some of the moves we have seen across the market.

EURUSD is probably the most remarkable reading in my opinion. We have seen three weeks that retailers have been net long (matching up perfectly to the reversal in the underlying pair). However, the reading is still very weak - staying well below 1.50. In fact, we have seen in dip below the parity line a few times during the day earlier in the week. This clearly shows that their is a strong probability that this may turn in to a deep retracement rather than a major trend change. I'm thinking 1.50 is the guage of trend. Major psychological level, major trendline, major fibs.

I also thought GBPUSD was a notable. Fortunately, when I wrote the weekly report, the pair dropped below 1.96 and we saw the ratio in positive territory. Though, while this was an important technical level, we can see from the still mild SSI reading that the move wasn't the make or break trigger. It will probably be 1.94, so if we test that next week, I'll be keeping my eye on the SSI to see whether pressure is building for a break.

my currency situation on gbpjpy

The selling of currencies to cause a change in the price of goods that are exported works for the exporting countries. The buying of currencies to cause the offset the price of goods wanting to be sold to the same county that sells the currency also works. That's what happens when countries trade levels and balances of debts are in conflict like the US and China. The current cost to deliver goods has made the US dollar to low to sell to them. That means the dollar has to go up in value to offset the cost of goods to point of delivery. Since the crude oil prices are impacting all economies at home it also impacts the cost of goods to delivery points. The only way to offset this is to buy the USD to make a non foating currency like the Yaun to be lower and therfore continue the sale of products to the US and elsewhere. It causes other currencies to move because the USD is the crude dollar. Some countries want that to be changed. They would like the crude price in their currency. That will never happen, as the biggest consumming nation of crude is the biggest buyer and it buys with its currency. The strongest nation being the US also insures the strength of the dollar in its ability to be stable by physical strength of its military and citizens economic statis. So watch the the crude go up along with the strength of the dollar to offset the impact on countries that sell to the biggest comsummer the US.

The are a number of interesting developments in positioning that I have been monitoring this week. I'm particularly interested in the build up in long-side positioning in USDCAD, the EURUSD's SSI holding near parity and GBPUSD's reading near big support.

USDCAD has its most extreme long reading in six months, just when USDCAD is near the bottom of a two month old, trend channel (that happens to have support at parity). This is a strong reading and a breakout is tempting, but it should be noted that retailers are good at trading the ranges; and USDCAD is certainly in a range and we are certainly quite a ways away from the extremes of last year.

For EURUSD, it is the lack of any extreme in positioning that has me interested. We have seen a negative flip today, but we have been seeing them all week on an intraday basis. We have seen a significant reversal in this pair from record highs, but at the same time, we haven't really cleared many major technical levels of support and I wouldn't say that we have a 100% certain trend change just yet. With the SSI near parity, there seems no momentum to either side.

GBPUSD on the other hand is more active. While the SSI reading isn't an extreme by any means; its ability to hold positive with major support nearby (1.94) is interesting in my book. Retailers are used to their range skills working with this congested pair, so I wouldn't be surprised if the positive reading builds over the coming days if spot hovers around were it's at right now. If that is the case, we could see some serious volatility if the GBPUSD's downward trend pushes through 1.94.

Anyone looking else looking at any particularly interesting sentiment/trade setups?

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The USA can handle higher oil prices easier than the European's, as the price has been high in Europe for years, and the efficency of their vehicles has been at a maximum also for years. In the USA, however, the efficiency is just starting to be a factor in production. It was estimated that the USA would be at 10% diesel sales by 2015, from the 4% current. The accelerated fuel price increase will push these diesel sales to record highs. That is how the USA economy will survive the economic impact of higher oil prices. Europe, however, has no way to offset the cost, thus a drop in the usage is the only way out. That will put the USA in a better position and therefore strengthen the USD against many currencies. This European currency drop has been seen coming by big investors like Warren Buffett, who will jump in and buy at the point where those currencies are the lowest. The ECB will have to drop rates soon to give business a boost which may be to little to late. European economist thought the USA FED was moving to fast, but they were wrong.

A major public statement made today by Iran indicates they will comply and get in on the GCC move to market based economy. It was thought they were talking no deal two days ago but now they sound serious. The massive Embargo has put the ships to all stop and international flights ended. The economy has to be revived, and so they now say they are not interested in weapons of mass destruction and want in on the regional GCC stock market that is due on line sometime in 2010. That means crude will flow and the entire Middle East will be stabailized. UP GOES THE USD AND DOWN GOES THE FUTURES MARKET FOR CRUDE. We all need this, so be it!

Yenom, would you mind providing a source for this major public statement made by Iran on June 3, 2008 which indicates they will comply and get in on the GCC move to market based economy? Please provide a link or a quote with a source.

I'd like to see at least a quote, since on the same date I have seen highly promising Iranian public statement about Iran's possible acceptance of "internationally controlled" uranium enrichment program.

Thanks for your help.

i saw the daily fx plus video this morning & it looks like the SSI on the USDCAD has come down from its extreme levels last week. i wanted to enter long on this pair but i'm afraid it may be too late. what do you guys think?

he talks about it around 14:07
http://forex.acrobat.com/p66422007/

pip, it's not too late to buy the usdcad. now that the fed has calmed downn and isn't playing with int rates, along with how the dollar has been doing in the past few days, its a good bet that the usdcad will return to higher levels. anyone else got any thoughts here?

Hi Pip, check this out:

http://www.dailyfx.com/story/currenc...568761829.html

The bankf of canada seems pretty realistic in its forecasts, and though the USDCAD has been hit recently, the CAD should bounce back. Don't forget that canada is the NUMBER 1 supplier of oil to the US, and as oil prices continue to climb in the future (I think we can all agree on that) that should help the USDCAD continue to fall.

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How much should the B&B debacle weigh on the pound, is it another Northern Rock or will the BOE let it fail. What are the best curriencies to trade with respect to low risk premium, etc.