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Euro Likely to Rally vs US Dollar on Clear Shift in Forex Sentiment
Thursday, 08 January 2009 14:41:48 GMT  |  David Rodri­guez, Quantitative Analyst and Antonio Sousa, Chief Strategist
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EUR/USD ratio: -1.11
Trading Forecast: Bullish

 

ssi_2009-01-08_EUR


EURUSD – Forex trader positioning in the Euro/US Dollar has remained volatile, and speculators have recently flipped to net-short the EUR/USD through recent trade. The ratio of long to short positions in the EURUSD stands at -1.12 as nearly 53% of traders are short. This stands in contrast to yesterday when the ratio was at 1.22 as 55% of open positions were long. Short positions have gained significantly on the day—up 27.5 percent since yesterday and 14.8 percent increased since last week. The sudden jump in forex crowd short positions gives us a contrarian view that the Euro/US Dollar may continue to gain through the near term. Yet our SSI-based forex trading signals are currently flat the Euro/US Dollar after selling the pair aggressively through past weeks of price action.

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