US Dollar Targets Lows versus Euro as Forex Sentiment Favors Losses

EURUSD – Euro Targets Break, Move towards $1.35

GBPUSD – British Pound Pullbacks May be Bought

USDJPY – US Dollar Forecast to Test Key Support vs. Yen

USDCHF – Swiss Franc Trades Nervously on SNB

USDCAD – Canadian Dollar Forecast to Hit Fresh Peaks

GBPJPY– British Pound Offers Range Trading vs. Yen

A major US Dollar (ticker: USDOLLAR) break against the Euro, British Pound, and Japanese Yen warns that the Dow Jones FXCM Dollar index may trade on to fresh yearly lows. Our retail forex trading crowd sentiment indicator likewise calls for USD weakness.

Forex trading crowds have bought aggressively into US Dollar weakness, and today’s major break lower in the Dow Jones FXCM Dollar Index suggests this may be the move necessary to bring volatility back to major FX pairs.

As it stands we are looking to sell into any US Dollar bounce versus the Canadian Dollar, Euro, British Pound, and even the Japanese Yen. How far could the USD drop? A major break below major congestion support for the Dow Jones FXCM Dollar Index leaves next major support at Year-to-date lows. Such a USDOLLAR move would likely push the EURUSD towards February highs near $1.35.

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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