Euro Positions at Record, Further Losses Seem Likely
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Trade Implications – EURUSD: Our proprietary retail FX positioning data shows traders are their most long the Euro versus the US Dollar on record, and when everyone buys we typically look to sell. This factor in itself keeps us looking for further EUR losses.
The important caveat is that these sentiment extremes can often coincide with significant turning points. There’s no way to know when/if we’re at THE low, however, and until we see a significant shift in sentiment we’ll keep in favor of continued EURUSD declines. Key support comes in at November lows of $1.33, and a breakdown leaves little in the way of a move towards September’s trough near $1.31.
See next currency section: GBPUSD - British Pound Breakdown Confirmed, Look for Losses
--- 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.