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Euro Forecast Bearish on Forex Crowd US Dollar Selling
Friday, 02 January 2009 21:19:21 GMT  |  David Rodriguez, Quantitative Analyst and Antonio Sousa, Chief Strategist
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EUR/USD ratio: 1.22
Trading Forecast: Bearish 

EURUSD – Our sentiment-based bias for the Euro/US Dollar is currently bearish. The ratio of long to short positions in the EURUSD stands at 1.22 as nearly 55% of traders are long. Yesterday, that same ratio stood at -1.13 as 53% of open positions were short. A 20.8 percent jump in long positions signals that the forex trading crowd is becoming increasingly bullish. Short positions are 12.5% lower than yesterday and 2.8% weaker since last week. Yet we caution that the sharp drop in trader Open Interest weakens the strength of the current SSI signal; total positions are 20.7% below their monthly average. The SSI is a contrarian indicator and signals more EURUSD losses. Our SSI-based forex trading signals remain short the Euro/US Dollar via two sentiment-based trading strategies.

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