Euro Reversal Risk Grows as Forex Positions Moderate
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EURUSD – The Euro continues to trade in a tight range versus the US Dollar, and indecisive forex trader sentiment suggest we’ll need to wait for the next clear move before establishing a firm trading bias.
Trade Implications – EURUSD: Over the past three weeks we’ve cited one-sided FX trader positions as reason to expect further Euro weakness. Yet our data shows that retail traders are almost exactly neutral in the EURUSD; open long positions are roughly equal to short positions.
The large Euro downtrend and US Dollar uptrend keeps us bearish, but we’ll wait for a clearer shift in sentiment before taking a strong trading bias. Continued consolidation raises risks of a larger EURUSD bounce.
See next currency section: GBPUSD - British Pound Forecast to Hit Fresh Lows
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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