– Forex traders have shifted from a record Dollar long to selling into its recent bounce
– European currencies are particularly at risk of further weakness
– Beginning of the New Year may set the pace for the rest of 2014
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View individual currency sections:
EURUSD – Euro at Major Risk of Further Declines
GBPUSD – Looking for British Pound Weakness to Buy the Dip
USDJPY – Yen Weakness May Not Be Finished in Early-2014
Gold – Peaks Below $1200 but Might See a Small Rebound First
SPX500 – SP 500 Needs to Show its True Colors
AUDUSD – Australian Dollar Still Looks like a Sell
Weekly Summary of Forex Trader Sentiment and Changes in Positioning
Retail forex traders have bought aggressively into recent Euro weakness versus the US Dollar, and the substantial shift in forex sentiment warns that the EURUSD may yet continue lower. Indeed last week we highlighted that ‘the crowd’ was at its most net-short Euro on record. Yet many of the same traders seem to have capitulated and are now buying into the EUR tumble.
See specific US Dollar forecasts in the sections above, and sign up for future e-mail updates via this author’s e-mail distribution list.
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— Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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