It’s Time for the Euro to Tell us Where it’s Headed
Trade Implications – EURUSD: We’ll use our proprietary Speculative Sentiment Index data as a contrarian indicator to price action; if everyone’s selling, we’ll typically look to buy. And last week we claimed that a surge in EURUSD buying confirmed the top.
Our sentiment-based Momentum2 trading system did well in going short EUR from $1.3270, but we’ll need to see a further pickup in crowd EURUSD buying to feel confident in continued Dollar strength—particularly as the pair trades at its key 200-day Simple Moving Average.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.