EURUSD – Retail FX crowds have continued to sell into Euro gains as it trades near year-to-date peaks, and exceedingly low volatility prices suggest that the EURUSD may fail to break higher.
Trade Implications – EURUSD: Our proprietary sentiment data shows that over 70 percent of retail traders are currently short EURUSD. We most often use our SSI data as a contrarian indicator to price action; if everyone’s selling, we like buying. But the retail crowd is often ‘right’ at major turning points, and indeed our data shows that most retail traders do well in low–volatility environments.
We won’t make a habit of it, but we like joining the crowd in selling the EURUSD against the highs. From a price perspective, our Senior Technical Strategist writes that a EUR drop below $1.3370 could confirm a reversal.
— Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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