Our forex trading sentiment gauge continues to forecast further US Dollar gains, as trading crowds have persistently sold into USD rallies and given contrarian signal to go long. In fact, the majority of traders flipped net-short the US Dollar against the Euro when the pair crossed below 1.4400 and gave clear signal to go short. Crowd sentiment has still remained fairly net-short the US Dollar, and we have little reason to trim our exposure to bets on USD appreciation. Of course, the faster it rallies the more likely it will post a short-term turnaround, and risk/reward ratios on USD-long positions has faded with its recent gains.
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