Euro Targets Highs on Crowd Sentiment
EURUSD – We continue to call for further Euro strength as trading crowds remain short and continue selling into rallies. Our Speculative Sentiment Index data shows that the number of traders short the EURUSD outnumber those long by -1.91; 66 percent of traders are short. Said ratio first turned negative when the pair broke above $1.27, and we have little reason to stray from our bullish bias.
It is further worth noting that the absolute level of short interest is now at multi-week highs; shorts are up 13% since last week. Long positions have actually fallen 6% through the same stretch, and the overall crowd bias is increasingly clear.
As we argued in last week’s Euro forecast, there is considerable risk that the EURUSD could trade significantly higher. We see little major technical resistance until the December high near $1.3550.
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--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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