Euro Unlikely to Break Highs - We Like Selling Strength
EURUSD – Forex trading crowds remain short the Euro versus the US Dollar, but a noteworthy build in long positions suggests that the EURUSD could in fact head lower through near-term trading.
Trade Implications – EURUSD: Yesterday we cited low FX market volatility as a key reason the pair was unlikely to press to fresh highs—making it an attractive short position. By that same token we can’t wholeheartedly advocate selling aggressively into weakness; during slow-moving markets, currencies are less likely to break substantively higher or lower.
Our SSI-based trading strategies are currently flat the Euro against the US Dollar, but we remain mostly in favor of selling into significant strength against the month-to-date high of $1.3242.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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