Euro May Continue to Trade Lower According to Sentiment
EURUSD: Retail trader data shows 49.6% of traders are net-long with the ratio of traders short to long at 1.02 to 1. In fact, traders have remained net-short since Apr 06 when EURUSD traded near 1.22841; price has moved 0.6% lower since then. The number of traders net-long is 20.5% higher than yesterday and 26.5% higher from last week, while the number of traders net-short is 5.8% higher than yesterday and 17.3% 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.
--- Written by Dylan Jusino, DailyFX Research