Forex trading crowds remain heavily net-long the US Dollar through time of writing, leaving little scope for a short-term Dollar recovery. Last week we called for continued USD losses on one-sided positioning, and indeed the Greenback continue to lose ground as our SSI ratios remained extreme. More recently we have seen somewhat of a moderation in Dollar longs, but we can hardly call for major reversals until we see price move substantively in the same direction. As it stands, we remain bearish and forecast losses in the US Dollar. Of course, the further it falls, the more likely a substantive reversal. Indeed, forex futures and options positioning suggests that US Dollar sentiment remains at bearish extremes—making a recovery likely in the foreseeable future.
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