Euro Likely Set Major Top - What's Next?
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Trade Implications – EURUSD: Last week we highlighted that forex traders were previously their most net-short EURUSD on record, which gave us a cautiously bullish contrarian bias. Yet the potential for a sentiment was real; crowds are often on the ‘right’ side of the trade at major tops/bottoms.
Total retail long positions are up a substantial 60 percent in the past 30 days, and the sharp swing helps confirm that the EURUSD may have set an important top. Our purely sentiment-based Momentum2strategy most recently sold from $1.3685 and $1.3582 as crowds buy. And indeed our Senior Currency Strategist updates key support and potential price targets to the downside.
--- 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.