Euro Forecast to Hit Further Lows on Major Sentiment Shift
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EURUSD – Continued Euro tumbles have been met with aggressive retail FX crowd buying, and our trader sample shows that traders are close to flipping to net-long the EUR/USD for the first time since March. We typically use retail positioning as a contrarian indicator to price action; crowds remain net-short and as such we might call for Euro gains. Yet the severity with which sentiment has flipped warns that the Euro may continue lower.
The pair currently trades at congestion-based support near $1.0900, and a further breakdown targets the May low near $1.08 and eventually a return towards the year-to-date low near $1.0440.
See next currency section: GBPUSD - British Pound Shows Early Signs of Turnaround
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.