EUR/USD at Long Term Downtrend Line before NFP

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Chart Prepared by Jamie Saettele, CMT

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-The USDOLLAR index just traded to its best levels since 1 day after the April top yet EUR/USD is above the summer lows (barely). The non-confirmation serves as a reversal warning. Last week, large speculators (trend followers) sold the most euros in one week since at least 2000. This extreme selling by trend followers is short term contrarian (doesn’t mean the larger trend is not down…simply casts doubt on the immediacy of the coming decline). Pay attention to SSI, which recently flipped to long (which is bearish).

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