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Euro Downtrend Seems Clear - We Like Selling Strength

By , Quantitative Strategist
27 June 2013 14:20 GMT
ssi_eur-usd_body_Picture_12.png, Euro Downtrend Seems Clear - We Like Selling Strength

EURUSD – Retail forex crowds have remained impressively short Euro against the US Dollar despite a sizeable EURUSD pullback. But the shift in positioning gives us clear contrarian signal for further declines.

Trade Implications – EURUSD: Our “Tidal Shift”/Momentum2 strategy went short EURUSD from last week at $1.3245 as crowds bought aggressively into sharp declines. The trade seems obvious in hindsight, but the truth is that I think the same SSI-based strategy stands to do well going forward—especially as market conditions might favor a Euro decline toward $1.20. Short-term declines seem a bit overdone and we’ll probably need to allow for a short-term EURUSD bounce, but the substantial shift in sentiment leaves us in favor of selling Euro strength.

--- Written by David Rodriguez, Quantitative Strategist for

ssi_eur-usd_body_1a.png, Euro Downtrend Seems Clear - We Like Selling Strength

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27 June 2013 14:20 GMT