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EURUSD – Retail FX traders have taken profit aggressively into the Euro’s recent slide, and crowds are now their least short EURUSD since it bottomed near $1.35 in early February.
Trade Implications – EURUSD: We’ve remained steadily in favor of going against the crowd and buying into Euro strength. Yet the substantial weekly swing warns that the pair may have set an important short-term top and could trade lower.
Our purely sentiment-based Momentum2 strategy has now sold from $1.3842, while our Senior Strategist writes that the turn lower leaves the near-term trend bias to the downside. We’re wary of over-committing to the turn given forex volatility near record lows, but we thus far see evidence of a material shift in sentiment and potentially price.
See next currency section: GBPUSD – British Pound Rally Likely to Remain Intact versus Dollar
— Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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