News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • Get your snapshot update of the of top level exchanges and key index performance from around the globe here: https://t.co/d8Re5anlG5 https://t.co/xFYoNUKhsM
  • Currency exchange rates are impacted by several factors. Are different world leaders a contributing factor? Find out here: https://t.co/4jsORznRTE https://t.co/ZjrCYXTIdD
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here: https://t.co/BdgFmkRxVw https://t.co/dPE4AsJxqv
  • What are some trading takeaways from 2020, as we jump into the new year? Find out with your free guide here: https://t.co/e7udCTJlmf #DailyfxGuides https://t.co/9bsQkh2WMF
  • Trading Forex is not a shortcut to instant wealth, excessive leverage can magnify losses, and sentiment is a powerful indicator. Learn about these principles in depth here: https://t.co/lZFM8youtX https://t.co/DJccj3qiig
  • Risk management is one of the most important aspects of successful trading, but is often overlooked. What are some basic principles or risk management? Find out from @PaulRobinsonFX here: https://t.co/IsnpfJhp91 https://t.co/UK4E7wD6s8
  • Copper is on track to make a sixth consecutive monthly gain as prices inch towards its all-time high. The global backdrop remains supportive despite a short-term pause in the rally. Get your market update from @FxWestwater here:https://t.co/STEYeIG042 https://t.co/R794ENkS3c
  • Retail trader signals still hint that the Dow Jones and S&P 500 may be at risk, placing the focus on year-long rising trendlines to see if dominant upside biases hold.Get your market update from @ddubrovskyFX here:https://t.co/lFpzIFNmzW https://t.co/FoHTLDJWJe
  • The path for the Japanese Yen seems to favor the downside looking at a majors-based index. USD/JPY may rise within its Ascending Channel, but there is some scope for a healthy correction. Get your market update from @ddubrovskyFX here:https://t.co/7XFJiCYYEM https://t.co/KfLyB2t1jP
  • The British Pound’s recent slip lower against its major counterparts may prove short-lived. Key levels to watch for GBP/USD, GBP/JPY, GBP/CHF and EUR/GBP. Get your $GBP market update from @DanielGMoss here:https://t.co/Y48cF2qi9M https://t.co/ia3Bgq0ZTp
66% of EURUSD Retail Traders Are Buying, What This Means For You

66% of EURUSD Retail Traders Are Buying, What This Means For You

Rob Pasche, Forex Trading Instructor

Talking Points:

  • EURUSD SSI (retail sentiment) has broken above +2.00
  • SSI can have an inverse relationship with price
  • Euro sellers have many support levels to watch

After the 40 pip rally last Friday, the EURUSD has fallen to multi-month lows today. Many retail traders have taken this opportunity to buy “cheap” Euros, expecting the EURUSD to make a low and then bounce higher; but traders that follow sentiment likely have a different idea. Today we take a look at the most popular currency pair and develop a trading plan using sentiment and support and resistance.

66% of EURUSD Traders are Buying

When 2/3rds of a trading group are buying a particular pair, it translates to an SSI value of +2.00. In other words, we have 2 buyers for every 1 seller, a 2:1 ratio. +2.00 is the current SSI value for the EURUSD as traders load up on buy positions, but what does this mean for us?

Historically, sentiment and price tend to have an inverse relationship with each other. During times when SSI is a positive value, we often see price fall; when SSI is a negative value, we often see price rise. This is one the basic principles of How to Use the SSI, my favorite trading tool.

The chart below shows the last 10 weeks of EURUSD’s price and SSI ratio. We can see that price rose during periods of negative sentiment and fell during periods of positive sentiment. When SSI was neutral, price trekked sideways

Learn Forex: EURUSD’s Price and SSI Relationship

66% of EURUSD Retail Traders Are Buying, What This Means For You

(Created using real-time SSI, available through DailyFX On-Demand)

Purely looking at sentiment, I have a sell bias towards the EURUSD.

EURUSD Breaking Significant Lows

To go along with our sentiment-based bias, we are also witnessing the EURUSD fall to near 9-month lows. The medium-long term perspective sees the Euro in a current down trend. Following the old adage “the trend is your friend,” it would make sense for trend traders to look to short the EURUSD pair. So this means both sentiment and trend are confluent to selling the EURUSD.

But just because we have two valid reasons to sell the EURUSD, doesn’t mean it will be an easy trade. There are a few support levels that could get in the way of a major move to the downside.

Learn Forex: EURUSD Breaking to 9-Month Lows with Various Support Levels

66% of EURUSD Retail Traders Are Buying, What This Means For You

(Created using FXCM’s Marketscope 2.0 Charting Package)

The chart above combines psychological price levels (levels ending in “000”) as well as Fibonacci Expansion levels. We should expect to see price struggle to break below 1.3300, 1.3209, 1.3100, and 1.2906. It might be wise to take partial profits when price is able to reach these levels, as the EURUSD could bounce off of any of them.

Once we decide on our profit targets using these levels, we can then set our stop losses to give us a positive risk:reward ratio.

Sentiment Spurring Shorts

We don’t know what’s going to happen in the future, but it’s a trader’s job to notice patterns and discover non-random occurrences in a seemingly random market. Using sentiment as a guide can assist in that as well as locating strong trends. To trade the EURUSD risk-free, download a Free Forex Demo account today.

Good trading!

---Written by Rob Pasche

Start your Forex trading on the right foot with the Forex Fast-Track Webinar Series. This 4-part, live webinar course is the disciplined Traders’ Fast-Track to the Forex Market. Topics include:

  • Using FXCM’s award-winning trading platform
  • Calculating Leverage and reducing risk
  • Trading with a simple (yet effective) trading strategy
  • Maintaining for Forex account and enrolling in on-going education

This course is completely free, so sign up or watch on-demand today.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES