EURUSD – Forex retail trading crowds remain steadily net short the Euro against the US Dollar (ticker: USDOLLAR), giving us little reason to stray from our consistent calls for EURUSD gains. That said, the Euro has essentially traded flat through the month of March, and it seems unlikely that we would see any strong moves in either direction in what has been an especially quiet period of price action.
The change in month quite often brings a change in trend, and April may be exactly what we have awaited. Based on FX Futures and Options sentiment, we expect that the Euro may continue to strengthen against the US Dollar. Such analysis lines up well with our retail FX trader sentiment, but it remains significant to watch whether the pair shows itself willing to break major resistance. The US Dollar itself remains stuck within a broad consolidative range, and our SSI-based Tidal Shift strategy was only able to take modest profits on a EURUSD-long position as the pair corrected its earlier advance.
Given that we have a bearish Australian Dollar bias, an open Euro/Australian Dollar long position may be the more attractive way to play Euro strength given the lack of conviction in US Dollar moves.
How do we interpret the SSI? Watch an FXCM Expo Presentation that explains the SSI.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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