Euro Dips Could be Bought, Rallies Sold
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EURUSD –The Euro seems unlikely to break significantly out of its recent trading range as volatility drops, and indeed our retail FX sentiment data shows traders have pulled back from recent extremes.
Trade Implications – EURUSD: Last week we cited high volatility and extreme retail trader sentiment as key reasons the Euro was likely to continue higher versus the US Dollar. Yet the EURUSD rally obviously proved short-lived and rendered our forecast premature at best.
Indecisive moves look likely to continue until we break significantly out of the recent $1.1270-1.1500 trading range. In the meantime, buying dips and selling rallies within this range seems a reasonable trading strategy.
See next currency section: GBPUSD - British Pound Forecast to Hit Further Highs
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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