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EURUSD – A substantial swing in Euro/US Dollar trader positioning warns that the Euro likely set an important top, and a continued shift in sentiment warns of further EURUSD losses.
Trade Implications – EURUSD: Last week we wrote of the risk of a Euro turnaround on the major shift in sentiment and noted that our purely sentiment-based Momentum2 trading strategy had sold from $1.3842.
The break below trendline support and the sharp shift in sentiment adds further conviction to our calls for declines. Our Senior Technical Strategist sees scope for a Euro depreciation into $1.3294. The fact that retail trader long positions have grown by a substantial 130 percent further warns of weakness.
See next currency section: GBPUSD - British Pound at Pivotal Price Levels, Next Move is Key
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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