Euro Nears Turning Point as Sentiment Shift
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EURUSD – Retail FX traders have remained mostly net-long the Euro versus the US Dollar, and a contrarian view of crowd sentiment has served us well as we’ve remained bearish into sharp EUR/USD declines. Yet it’s worth noting that ‘the crowd’ very recently turned net-short once again, and the sharp shift in sentiment warns that the Euro may soon turn higher.
The open position ratio is effectively neutral as approximately 51 percent of open trades are currently long, but a continued shift towards crowd selling would warn that the Euro is likely to rally further off of recent lows. At minimum, the sudden movement warns that we should trade with caution on any existing EUR/USD-short positions.
See next currency section: GBPJPY - British Pound Forecast to Gain further versus Japanese Yen
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.