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Euro Primed to Test Range Lows

Euro Primed to Test Range Lows

David Rodriguez, Head of Product

Why and how do we use the SSI in trading? View our video and download the free indicator here

EURUSD – Retail FX traders have bought into recent Euro declines versus the US Dollar, and once again this acts as confirmation that the EUR/USD has made a false attempt at a breakout only to stick to its narrow range. We most often treat retail FX trader sentiment as a contrarian indicator to price action, and indeed last week we cited heavily-short trader positions as a key reason we looked to buy.

Yet it remains clear that retail traders will often do well in range-bound market conditions; buying low and selling high works best in directionless markets. A recent shift towards crowd buying suggests the EUR/USD may continue onto range lows, but we will likely need to see a big jump in volatility to take real conviction in our near-term trading forecasts.

See next currency section: GBPUSD - British Pound Forecast to Break Key Lows

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Contact David via Twitter at http://www.twitter.com/DRodriguezFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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