Euro at Clear Risk of Further Declines
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EURUSD – Retail FX traders have steadily bought into recent Euro weakness, and a contrarian view of crowd sentiment points to further EURUSD depreciation.
Trade Implications – EURUSD: Two weeks ago we highlighted key risks of an important Euro bounce as a substantial shift in retail positions pointed to further EUR strength and USD weakness. And indeed the single currency bounced as the Greenback lagged. Since then we’ve seen crowds buy aggressively into the Euro’s test of key lows near $1.2600, and a steady build in long interest leaves the EURUSD downtrend intact. A break below $1.2585 would further instill confidence in our calls for further weakness.
See next currency section: GBPUSD - British Pound Remains a Sell versus the Dollar
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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