Retail Traders Heavily Long US Dollar Ahead of FOMC
EURUSD – Retail trading crowds have sold the Euro as it breaks to multi-month highs against the US Dollar (ticker: USDOLLAR), and our contrarian retail sentiment-based strategies remain long EURUSD from last week.
Our proprietary Speculative Sentiment Index data shows that the number of retail traders short EURUSD outnumber those long by over 2 to 1, and indeed short interest is currently near its highest levels since February.
It’s admittedly difficult to advocate getting long EURUSD ahead of a critical US Federal Open Market Committee Rate Decision, but current momentum and our retail-based sentiment data favors buying recent Euro strength. How do we interpret and trade with the SSI? Watch an FXCM Expo Presentation that explains the SSI.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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