Violent Euro Rally Warns that Downtrend is Over
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EURUSD – Retail FX traders have sold aggressively into today’s Euro rally versus the US Dollar, and our data shows that ‘the crowd’ is now net-short EUR/USD for the first time in a month. A contrarian view of popular sentiment suggests that the Euro could rally to further highs.
And indeed we had seen many of the same traders remain net-long with few interruptions since the pair crossed below $1.14 in September. It’s certainly possible that this is another brief interruption within the context of a larger EUR/USD downtrend, but the aggressive shift in sentiment warns that the trend likely turned.
See next currency section: GBPUSD - British Pound Remains in Clear Downtrend, Losses Likely
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.