Euro Likely to Fall Further Until this Changes
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EURUSD – The majority of retail FX traders in our sample remain marginally net long the Euro versus the US Dollar, and a contrarian view of ‘crowd’ sentiment signals that further EUR/USD losses remain likely. This stands in sharp contrast to just 10 days ago when traders had remained short through the preceding three months. The clear shift warned that trends had shifted, and indeed continued crowd buying acts as confirmation of the turn lower for the EUR/USD.
A key caveat is recent price action has been mixed as of late, and a continued hold of near-term support at the pair’s 200-day Simple Moving Average near $1.1100 warns against establishing fresh short positions. We may instead look to sell into rallies—particularly if retail traders remain net-long the EUR/USD.
See next currency section: GBPUSD - Watch Retail Sentiment on British Pound into Brexit Vote
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.