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Euro Forecast to Recover Against US Dollar on Forex Positioning
Thursday, 13 November 2008 14:28:15 GMT  |  David Rodriguez, Quantitative Analyst
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EUR/USD Ratio: -1.29
Trading Forecast: Bullish

Forex Positioning in the Euro/US Dollar Pair

Forex_Trading_2008-11-13_2

EURUSD – A strong jump in US Dollar long positions across the board suggests that the Euro may soon turn against the surging US Dollar. As recently as several weeks ago, we saw that forex trading crowds continued to buy into Euro/US Dollar tumbles. Yet the recent jump in Euro/US Dollar short positions shows that many are now trying to latch on to the clear downtrend—an occurrence that we often see towards the end of a strong trend. Indeed, the ratio of long to short positions in the EURUSD stands at -1.30 as nearly 57% of traders are short. Yesterday, the ratio was at 1.04 as 51% of open positions were long. The flip from net long to net short adds further weight to the bullish case, as we see sentiment has noticeably shifted. Short positions are 51.7% higher than yesterday and 78.8% stronger since last week. Our SSI-based trading signals have recently sold the Euro/US Dollar across two separate trading strategies.

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