Thursday December 8, 2005 - 16:14:42 GMT
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FOREX: GVI monthly Forex Survey Results Analysis by Cumino
Analysis courtesy Cumino:
GVI Forex Sentiment survey analysis:
The first number is the Bull Index (two weeks ago in brackets). The 3 following numbers are the components, in this order: strong bears, neutral, strong bulls (previous).
EUR USD 3 months: 1st day close 1.1795(1.1997), av. responses 1.1764 (1.2143), Adjusted boundaries 1.14-1.22 (1.16-1.24).
GVI 49% (63%) COMPONENTS 30%, 42%, 28% (19%, 35%, 46%)
Neutral in absolute terms and BTW 49% is also the mean of the whole history. Index is bearish in relative terms with bulls reduced by roughly 20%. The previous reading was a clear signal to sell EUR, this is neutral. Dry index (the blue line in the graphs) is 49% too. No particular indications, apart that posture should be reactive, and to this regards technicals seem favored.
Medium term crowd surveys show a similar pattern, simply there is not too much risk on the plate.
USD JPY 3 months: 1st day close 120.78(116.67), av. responses 120.14 (113.00), Adjusted boundaries 116-124 (113-121).
GVI: 45% (23%) COMPONENTS: 25%,60%,15% (56%, 42%, 2%)
The previous result was the strongest sign to buy JPY (sell USD) ever seen. The extremely bullish JPY sentiment was not justified by the technicals nor fundamentals. Now there are diminishing hopes about the timing of a tightening of monetary policies, a deteriorating bilateral balance, some evidence of hedges being lifted, growing buying of foreign bonds by residents, and huge retail fx flows). Remember that the previous survey was conducted on November 1 and 2, just when USD, after a consolidation period with several successfully tests to the low support at 115, already started a run from that point leaving definitively the 115 as well as the 38.2 Fibo area.
Now the reading is 45% (long term mean is 41%) with components reversing from an astonishing previous 2% bullish USD to a more normal 25% and more than halving the 56% bullish JPY.
Dry index is at 55% one of the highest USD dry bullish readings, suggesting that a brief term correction could happen.
OIL 3 months: 1st day close 59.94 (60.35), av. responses 59.69 (58.18), Adjusted boundaries 53-67 (53-67)
GVI: 49% (45%) COMPONENTS: 13%,77%,10% (17%,76%,7%)
Neutral in absolute terms, slightly bullish in relative terms. Mean of the all period is 40%, while the dry index stands at 59%, very high and the second highest dry ever seen. If the sign is reliable, i.e. represents sentiment, but some doubts are reasonable, selling rallies should be the preferred strategy.
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