Fresh Euro Highs Favored on Sentiment
EURUSD – Trading crowds turned aggressively short the Euro against the US Dollar as the pair broke above 1.2700, and fairly consistent selling suggests that the EURUSD could yet trade to further highs. The pair has recently consolidated and has yet to break convincingly above the psychologically significant $1.3200 mark. Yet the trend favors further short-term gains and trading crowd sentiment leaves us in favor of further highs.
Our SSI ratio of long to short positions in the EURUSD stands at -1.67 as nearly 63% of traders are short. Although past performance is no guarantee of future results, such one-sided extremes can often come at major turning points.
Near-term resistance remains at recent multi-month peaks of $1.3220, while support is at 2/1 lows of $1.3025. The next move may be pivotal, and we expect that a break to further highs remains more likely.
How do we interpret the SSI? Watch an FXCM Expo Presentation that explains the SSI.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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