Our sentiment-based strategies have rapidly switched direction on key US Dollar (ticker: USDOLLAR) and Japanese Yen currency pairs – this may be the start of a major USD and JPY reversal.
View individual currency sections:
EURUSD – Euro Breakdown Makes Next Dollar Move Critical
GBPUSD – British Pound Stops and Reverses – Is it a True Breakdown?
EURJPY – Japanese Yen Bounce Leads Systems to Buy
XAUUSD – Large Swing in Gold Positions Warns of Bounce, but We Prefer Selling
SPX500 – SPX500 Sentiment Warns of Further Losses
AUDUSD – Australian Dollar Chops Around – Watch Critical Support for Next Move
Weekly Summary of Forex Trader Sentiment and Changes in Positioning
Choppy price action has made for similarly choppy trading for our sentiment-based Momentum2 and volatility-friendly Breakout2 trading strategies. Last week we wrote that retail traders had been buying into US Dollar and Japanese Yen weakness—leading our systems to do the opposite and go long EURUSD, GBPUSD, EURJPY, AUDUSD, and other pairs.
Yet we’ve seen a substantive shift in retail trader sentiment, and our strategies have stopped and reversed. We hesitate to switch directions so rapidly, but if the facts change we must change. Strong FX options market volatility expectations across Japanese Yen pairs may particularly favor sharp market swings.
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View how to automate the high-volatility Breakout2 Trading System via our previous article and webinar recording.
Auto trade the trend reversal-trading Momentum2system via our previous article and webinar recording.
Trade with strong trends via our Momentum1 Trading System and view an archived webinar
Use our counter-trend Range2 Trading system and view an archived webinar guide on automation
— Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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