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EURUSD – Retail forex traders are near their most short Euro since it topped through early may. Combined with similar extremes across other Dollar pairs, one-sided sentiment favors a Dollar bounce.
Trade Implications – EURUSD: If most are short we typically like to be long, but extremely low market volatility suggests that the Euro may continue to trade within a broad range against the Dollar.
Indeed positions are at or near important extremes across Dollar pairs and warn of a potential Greenback reversal. The fact that the Euro stopped and reversed at important congestion resistance near $1.3700 leaves our focus lower.
See next currency section: GBPUSD - British Pound at Major Extremes - Key Warning
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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