Euro Forecast to Continue Rally
EURUSD – Trading crowds have remained fairly net short the Euro against the US Dollar, showing few important signs of relenting and giving contrarian signal to stay long into EURUSD rallies. Last week we claimed there was legitimate risk that the pair could have set an important sentiment extreme as the SSI ratio went below -3.00. Yet price has since continued higher, and we have little choice but to remain contrarian bullish the EURUSD until we see important signs of crowd capitulation.
The ratio of long to short positions in the EURUSD stands at -2.04 as nearly 67% of traders are short. Yesterday, the ratio was at -1.81 as 64% of open positions were short. In detail, long positions are 6.9% lower than yesterday and 15.0% weaker since last week. Short positions are 5.0% higher than yesterday and 5.6% weaker since last week. Open interest is 0.8% stronger than yesterday and 5.5% below its monthly average. The SSI is a contrarian indicator and signals more EURUSD gains.
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