It’s Time for the Euro to Tell us Where it’s Headed

DailyFX

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ssi_eur-usd_body_Picture_12.png, It’s Time for the Euro to Tell us Where it’s Headed

EURUSD – Retail forex traders have sold into the most recent Euro bounce versus the US Dollar, and the sudden shift in crowd positioning gives us pause in our previous calls for a major EURUSD top.

Trade Implications – EURUSD: We’ll use our proprietary Speculative Sentiment Index data as a contrarian indicator to price action; if everyone’s selling, we’ll typically look to buy. And last week we claimed that a surge in EURUSD buying confirmed the top.

Our sentiment-based Momentum2 trading system did well in going short EUR from $1.3270, but we’ll need to see a further pickup in crowd EURUSD buying to feel confident in continued Dollar strength—particularly as the pair trades at its key 200-day Simple Moving Average.

--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com

ssi_eur-usd_body_Picture_13.png, It’s Time for the Euro to Tell us Where it’s Headed

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