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EURUSD – Retail traders are near their most long the Euro versus the US Dollar on record, and a contrarian view of crowd sentiment leaves us firmly in favor of further losses.
Trade Implications – EURUSD: Traders recently turned net-long the Euro as it crossed below the $1.36 mark, and the fact that they continue buying leaves us with steady signal to remain short. The caveat remains that sentiment is often extremely long or short at major turning points—we could be near a EUR bottom. Yet trading below the key $1.33 mark opens up a larger decline into major reaction lows of $1.31.
See next currency section: GBPUSD - British Pound Forecast Favors Continued Weakness
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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