Euro May Rally Against the Dollar
EURUSD: Retail trader data shows 36.0% of traders are net-long with the ratio of traders short to long at 1.77 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.05498; price has moved 17.6% higher since then. The number of traders net-long is 2.1% lower than yesterday and 26.4% lower from last week, while the number of traders net-short is 3.6% higher than yesterday and 0.8% higher 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. Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger EURUSD-bullish contrarian trading bias.
--- Written by Dylan Jusino, DailyFX Research
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