The extent of the decline from 1.6039 makes it unlikely that 1.5611 will hold. Expect a bounce from current levels, perhaps a spike through 1.5750 next week in order to complete a small c wave before 1.5611 is put to the test. A break below there would bring an end to the series of higher lows and puts bears firmly in control.
Retail sentiment has once again shifted; and this time, speculative traders are positioning for the EURUSD’s long-term trend to remain intact. Over the past week, the Speculative Sentiment Index ratio jumped to its highest reading since last October - though this shouldn’t be too surprising considering the retail sector’s affinity for prominent technical levels. Today, the pair’s ratio stands at -1.59 with nearly 61% of the market group holding a long position.
Over the past month, volatile risk fluctuations have settled and put the focus back on the theme of the US dollar against all its major counterparts. This is largely a reflection of the importance of growth (as the US is the largest economy in the world and is therefore expected to pace a recovery) and the greenback’s position as the world’s reserve currency.