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US Dollar Targets Fresh Highs versus Euro, Yen on Forex Sentiment

By , Quantitative Strategist
15 March 2012 16:25 GMT

ssi_table_story_body_Picture_5.png, US Dollar Targets Fresh Highs versus Euro, Yen on Forex Sentiment

Our forex trading sentiment indicator favors further US Dollar (ticker: USDOLLAR) strength, and indeed a key sentiment-based strategy is long the USD against the Euro, Swiss Franc, and New Zealand Dollar.

Two weeks ago we wrote that the US Dollar could see further losses against most counterparts except the Euro. Our Speculative Sentiment Index (SSI)-based “Tidal Shift” strategy went short EURUSD from $1.3325 and has once again sold from $1.3060. Past performance is absolutely NOT indicative of future results, but the system has done well in recent months and we like the direction of the trade.

We likewise believe the US Dollar could trade higher against the Japanese yen based on US Treasury yields and our own proprietary SSI data. The suddenly resurgent Dow Jones FXCM Dollar index may have turned the corner and targets 6-month highs. Such a move would point to further EURUSD losses and USDJPY gains.

View an FXCM Expo presentation on the Speculative Sentiment Index for better understanding on how we use it in our trading.

ssi_table_story_body_Picture_11.png, US Dollar Targets Fresh Highs versus Euro, Yen on Forex Sentiment

How do we interpret the SSI? Watch an FXCM Expo Presentation that explains the SSI.

--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com

To receive the SSI via e-mail and other reports from author David Rodríguez, e-mail subject line “Distribution List” to drodriguez@dailyfx.com

Contact David via Twitter at http://www.twitter.com/DRodriguezFX

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15 March 2012 16:25 GMT