Euro Could Reverse Lower Despite Short Positions
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EURUSD: Retail trader data shows 37.6% of traders are net-long with the ratio of traders short to long at 1.66 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.06042; price has moved 3.0% higher since then. The number of traders net-long is 43.4% higher than yesterday and 5.9% higher from last week, while the number of traders net-short is 14.4% higher than yesterday and 4.4% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current EURUSD price trend may soon reverse lower despite the fact traders remain net-short.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.