Euro Trend Overwhelmingly Negative as ECB Cuts Rates
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EURUSD – The Euro has plunged versus the US Dollar as the European Central Bank cuts interest rates. Yet extremely one-sided sentiment warns against chasing weakness at these levels.
Trade Implications – EURUSD: FXCM Execution Desk data shows that retail traders remain near their most long EURUSD since the pair traded near $1.20, and this has acted as steady contrarian signal that it may fall further. Yet crowds are also often on the right side of the trade at major turns. The difficulty is that bottoms and tops are only clear in hindsight, and the trend remains overwhelmingly in favor of Euro losses. The risk of a low is nonetheless high enough such that we can’t advocate chasing weakness at these levels.
See next currency section: GBPUSD - British Pound Likely to Test Yearly Lows
--- 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.