EUR/USD: Shorts at 4-Month Highs Trigger a Bullish Bias
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Retail Traders Reduce Net-Long Positions Despite Recent Gains
EURUSD: Retail trader data shows 41.8% of traders are net-long with the ratio of traders short to long at 1.39 to 1. In fact, traders have remained net-short since Aug 21 when EURUSD traded near 1.15742; price has moved 1.2% higher since then. The number of traders net-long is 8.2% lower than yesterday and 15.4% lower from last week, while the number of traders net-short is 5.4% higher than yesterday and 8.8% higher from last week.
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EUR/USD Sentiment Prompts a Strong Bullish Bias
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 Jake Schoenleb, DailyFX Research
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.