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EURUSD – Our retail FX trader sample shows that the majority of traders have shifted towards selling into Euro strength, and a contrarian view of crowd sentiment gives us a modestly bullish trading bias.
Trade Implications – EURUSD: Last week we noted that indecisive price action and sentiment made it difficult to establish a firm position on the Euro/US Dollar, and this remains somewhat true as net positions show only 55 percent of open EURUSD positions are short.
We would ideally see a much larger shift towards selling before taking more conviction in any Euro trades—60 percent or higher is what we consider a strong signal in either direction. Until then, the EURUSD looks likely to consolidate further or trade slowly higher.
See next currency section: GBPUSD - British Pound Forecast to Continue Declines versus USD
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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