Euro Breakout is the Real Deal
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EURUSD – Retail forex traders have sold aggressively into the recent Euro rally, and today’s sharp breakout may likely prove the break higher we’ve waited for. Last week we were early in calling for such a EUR/USD break as price remained in its tight range. Yet the most recent price move and concurrent shift in sentiment gives confidence that today’s move may be the ‘real deal’.
Our data shows there are currently 2.1 Euro short positions for every 1 long—up substantially from the 1.2:1 seen last week. A contrarian view of crowd sentiment leaves us in favor of buying into gains.
And though there are clearly no guarantees that price will not return to its previous trading range, the severity of today’s price breakout and sentiment shift points to continued EUR/USD strength.
See next currency section: GBPUSD - This Indicator Called the British Pound Reversal, What Now?
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.