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FOREX ANALYSIS: Crowds Sell Euro, We Favor Gains

FOREX ANALYSIS: Crowds Sell Euro, We Favor Gains

2012-11-29 15:35:00
David Rodriguez, Head of Product
Share:
ssi_eur-usd_body_Picture_6.png, FOREX ANALYSIS: Crowds Sell Euro, We Favor Gains

Retail forex trading crowds have sold aggressively into Euro strength against the US Dollar (ticker: USDOLLAR), and indeed short interest has hit fresh year-to-date peaks. We most often take a contrarian view to crowd sentiment; if most traders are short, we prefer to go long. And indeed we see risks that the EURUSD continues to trade above the psychologically significant $1.30 mark.

Two of our SSI-based trading strategies have most recently gone long EURUSD from 1.2944 and 1.2984, but it remains important to watch how the Euro reacts to key resistance near the $1.3130 figure.

--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com

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