US Dollar Forecast is Clear: We Like Buying Dips

DailyFX

Forex trading crowd sentiment has become incredibly one-sided—leaving us in favor of further US Dollar (ticker: USDOLLAR) strength.

View individual currency sections:

EURUSD - Euro Downtrend Seems Clear - We Like Selling Strength

GBPUSD - British Pound Forecast Gets Downgraded - Watch for Declines

USDJPY - Japanese Yen Could Continue Lower versus US Dollar

Gold - Gold Prices in Obvious Downtrend - Sell Bounces

SPX500 - Forecasts Favor Further Stock Market Declines

AUDUSD - Australian Dollar Might Actually Outperform After Rout

Weekly Summary of Forex Trader Sentiment and Changes in Positioning

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I recently wrote clearly in favor of US Dollar strength—particularly against the Euro and other relative outperformers in 2013. My argument was based on incredible volatility across financial markets—particularly in US Treasuries, the S&P 500, and commodity prices.

On the forex side of things we see that one-sided retail trader sentiment mostly confirms calls for Dollar strength. The devil is always in the details, of course—the risk of a short-term US Dollar pullback is real. Yet I’ll look to buy USD declines (sell EURUSD bounces) via our sentiment-based trading strategies and our Momentum2/”Tidal Shift” system in particular.

Read full currency pair-by-currency pair rundowns in the links above, and follow future updates on retail sentiment and our trading strategies via my e-mail distribution list.

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

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