– US Dollar breaks major lows versus Euro and nears major support
– Forex retail trading crowds have bought aggressively into Dollar weakness
– A contrarian view of crowd sentiment leaves us in favor of further declines
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View individual currency sections:
EURUSD – Euro Forecast to Trade to Fresh Peaks; Our Systems Buy
USDJPY – US Dollar Outlook versus Japanese Yen Unclear Until This Happens
GBPUSD – British Pound Surges, We’re Bullish Above Key Highs
AUDUSD – Australian Dollar Targets Further Gains versus US Dollar
USDCHF – US Dollar May Test Major Low versus Swiss Franc
GBPJPY – British Pound Looks like a Buy versus the Yen
Weekly Summary of Forex Trader Sentiment and Changes in Positioning
The US Dollar has broken substantial lows versus the Euro and nears major price support versus the Japanese Yen and others. Why do we think it breaks lower?
Our Retail FX sentiment-based strategies have sold into USD weakness as crowds buy into the breakdown, and indeed broad outlook leaves us in favor of continued weakness.
The Dow Jones FXCM Dollar Index—a measure of US Dollar’s value versus the Euro, British Pound, Japanese Yen, and Australian Dollar—has broken convincingly below its 200-day Simple Moving Average.
Given the breakdown and a sharp shift in crowd sentiment, we see little choice but to remain in favor of continued USD weakness. Follow any future updates on retail positioning 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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