– Dollar surges post-ECB versus Euro but may have set a significant top
– Retail forex traders have sold into the post-ECB Euro bounce
– Our sentiment-based trading systems will likely sell the US Dollar on the positioning shift
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View individual currency sections:
EURUSD – Euro Likely Set Important Bottom as Crowds Give up Post-ECB
GBPUSD – British Pound Likely to Test Key Highs versus US Dollar
GBPJPY – Japanese Yen at Potentially Substantial Turning Point
Gold – Gold Prices Likely to Fall Further
SPX500 – SP 500 Sees Clear Skies Ahead
AUDUSD – Australian Dollar Likely to Fall to Fresh Lows
Weekly Summary of Forex Trader Sentiment and Changes in Positioning
The US Dollar surged versus the Euro following the European Central Bank rate decision, but a substantial shift in sentiment warns of an important EURUSD bottom.
Our retail FX sentiment-based strategies have done well buying into US Dollar strength as it reversed sharply off of multi-year lows versus the Euro. But today’s important swing in positions means that their next trades may actually be USD short orders (EURUSD, GBPUSD longs).
The next move looks critical, and it will be important to watch where the Euro/US Dollar exchange rate closes. Yet early signs favor an important reversal.
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— Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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