News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • Also, here is the schedule of FOMC meetings from now through the end of 2022. If the Fed doesn't signal taper today, next scheduled time is Nov 2nd and 'quarterly' event time is Dec 14th. Will taper be easier w/ one or two more high CPI updates? https://t.co/XFrwo24xbD
  • Here is my FOMC scenario table going into the rate decision. While a delay in the taper call seems feasible with the market wobble, there will always be wobbles before and the existential threat of a mkt tantrum. Always a hostage? https://t.co/MIDk28lQBS
  • Gold prices are pushing higher so far this week and the FOMC is waiting in the wings with their September rate decision. Get your market update from @JStanleyFX here:https://t.co/rVrJnq0Rgh https://t.co/td0i0PTQZz
  • RT @CEOAdam: SO FASCINATING! Dogecoin Poll was by far my highest ever read tweet. In 24 hours, 4.2 million views, my most ever retweets, mo…
  • Just checked the Fed's website to see if they accidently release the SEP (Summary of Economic Projections) early by accident - happened once before. Nope, not live yet; but this will be the link when it is: https://t.co/GcANEDVowq
  • Gold Price Forecast: XAU/USD Holds Support Ahead of the Fed - Gold Levels https://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/daily_fundamentals/2021/09/22/Gold-Price-Forecast-XAU-USD-XAUUSD-Holds-Support-Ahead-of-the-Fed-Gold-Levels.html $Gold https://t.co/JSZNMCc11w
  • RT @IGcom: What to expect from FED today? Join @JeremyNaylor_IG and @MartinSEssex live on the IG platform at 18:50 (UK) for the live announ…
  • AUD/USD is little changed from the start of the week following the limited reaction to the Reserve Bank of Australia (RBA) Minutes. Get your $AUDUSD market update from @DavidJSong here:https://t.co/t44yC8zG0K https://t.co/AJCTyiAWjx
  • China's Anqing City of Anhui province says the property firm linked to Evergrande failed to make payment for land site
  • The updated dot plot will be a major focus for today’s FOMC announcement — perhaps even more so than taper timeline language. This is because Fed Chair Powell’s speech at Jackson Hole emphasized the decoupling of balance sheet normalization from future rate liftoff. $USD $DXY https://t.co/L1PFXmnK3g
Euro Puts our Trading Strategy to a Real Test

Euro Puts our Trading Strategy to a Real Test

David Rodriguez, Head of Product
Euro Puts our Trading Strategy to a Real Test

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

EURUSD – The Euro is once again attempting to break out of its year-long trading range, and our data shows retail FX traders are selling aggressively into EUR/USD gains. Total short interest has surged 40 percent since last week, and indeed over 70 percent of all open retail trader positions are currently short.

We most often treat such one-sided sentiment as a contrarian indicator to price action—if everyone is short we look to go long. Our data shows retail traders close the majority of their trades out at gains, but the size of losses is historically far larger. Past performance is not indicative of future results, but in practice this means that our contrarian trading strategy can be expected to lose more often than it gains. That has been exactly the case as noted last week—retail traders tend to do well in slow-moving, range-bound market conditions.

This is relevant for the simple reason that we’ve seen retail traders sell EUR/USD ahead of key reversals for some time now, and it is entirely possible that current selling favors another reversal lower. Ultimately we believe going against the crowd is the winning strategy, but the risk that retail traders have it ‘right’ and the EUR/USD will reverse is quite high.

See next currency section:GBPUSD - British Pound May Stick to Tight Range

To receive the Speculative Sentiment Index and other reports from this author via e-mail, sign up for his distribution list via this link.

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.

DISCLOSURES