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Trade Implications – EURUSD: Last week we wrote that an important shift in sentiment favored Euro weakness as crowds bought into declines, and indeed the EURUSD traded into fresh multi-month lows. Yet traders sent the single currency sharply higher following today’s European Central Bank interest rate decision. Where does it leave us?
It was only two months ago when retail traders were their most net-short EURUSD on record, and the fact that short interest has fallen substantially still leaves our broader focus to the downside. Yet today’s sharp bounce clouds short-term outlook, and we’re watching key technical reaction levels for the next cues.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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