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

• EURUSD – Euro Forecast to Fall Further versus USD
• GBPUSD – British Pound Offers Range Trading
• USDJPY – US Dollar Sets Bottom Against Japanese Yen
• USDCHF – Swiss Franc May Fall Further
• USDCAD – Canadian Dollar Forecast Cautiously Bullish
• GBPJPY – British Pound Sets Significant Bottom vs. JPY

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.

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

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

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