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US Dollar Targets Lows versus Euro as Forex Sentiment Favors Losses

By , Quantitative Strategist
26 April 2012 15:58 GMT

EURUSDEuro Targets Break, Move towards $1.35

GBPUSDBritish Pound Pullbacks May be Bought

USDJPYUS Dollar Forecast to Test Key Support vs. Yen

USDCHFSwiss Franc Trades Nervously on SNB

USDCADCanadian Dollar Forecast to Hit Fresh Peaks

GBPJPYBritish Pound Offers Range Trading vs. Yen

ssi_table_story_body_Picture_8.png, US Dollar Targets Lows versus Euro as Forex Sentiment Favors Losses

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.

ssi_table_story_body_Picture_7.png, US Dollar Targets Lows versus Euro as Forex Sentiment Favors Losses

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

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
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26 April 2012 15:58 GMT