Our Strategies Sell Euro, but Careful Chasing Weakness Here
Trade Implications – EURUSD: Our purely sentiment-based Momentum2 and Momentum1 strategies sold into Euro weakness as crowds went in the opposite direction, while our volatility-friendly Breakout2 system likewise did well as EUR pairs saw big moves across the board. We wrote earlier in the week that Euro breakdown trades remained attractive as long as it remained below $1.2880, and indeed it did.
Yet yesterday’s webinar update on those volatility-based trades emphasizes why we now express caution at chasing Euro weakness. Namely: the Euro trades near critical support against the US Dollar, Japanese Yen, and Australian Dollar. We would be careful about chasing Euro weakness at these levels.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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