Euro Forecast to Decline Further Against US Dollar on Forex Positioning

Forex Positioning in the Euro/US Dollar

EURUSD – Currency trading crowds have recently bought the Euro against the US Dollar, and we forecast that the sudden shift in sentiment may bring Euro weakness against its US counterpart. The ratio of long to short positions in the EUR/USD stands near parity as approximately 51 percent of traders are short. This is an abrupt shift from yesterday, when 54 percent of positions were short the Euro/US Dollar—longs have jumped by 19.3 percent overnight. When Euro/US Dollar positioning is close to flipping to net-long on strong buying interest, we often see that price moves in the opposite direction. We forecast that the Euro/US dollar will continue lower through upcoming trade. Our SSI-based trading signals have subsequently sold the Euro/US Dollar across two separate trading strategies.