Euro Poised to Test Key Highs
EURUSD – Retail FX trading crowds have aggressively sold the Euro against the suddenly-downtrodden US Dollar, and our contrarian view of crowd sentiment leaves us plainly in favor of further declines.
Trade Implications – EURUSD: Our sentiment-based trading strategies recently bought the EURUSD from $1.3039 and $1.3085 as crowds do the opposite—I think the trades stand to do well as the Dollar weakens more broadly.
I wrote (and spoke) yesterday in favor of a US Dollar short position versus the Yen and other major counterparts—so far so good. It will be important to watch how the Euro reacts when/if it hits critical congestion resistance and a key 50% Fibonacci retracement mark at $1.3250.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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