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Trade Implications – EURUSD: Retail FX traders were recently their most short Euro since it topped near $1.3970 in March. Such one-sided sentiment extremes are often signs of a potential turnaround, and indeed the price and positioning reversal helps confirm that the single currency likely set an important high.
Fairly sharp declines leave the Euro at risk of short-term bounce, but our Senior Strategist writes that forex cycles favor EURUSD weakness through at least the next week. Failure to close above $1.3820 keeps our focus to the downside.
See next currency section: GBPUSD - We Favor British Pound Gains Until this Level Gives Way
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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