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.
In the past three months there has been a clear and so far inexhaustible rally in risk appetite. While this has broadly pummeled the US dollar, it has also encouraged a jump in demand for those currencies backed by commodities and high yields.