EURUSD – Retail trading crowds have sold the Euro as it breaks to multi-month highs against the US Dollar (ticker: USDOLLAR), and our contrarian retail sentiment-based strategies remain long EURUSD from last week.
Our proprietary Speculative Sentiment Index data shows that the number of retail traders short EURUSD outnumber those long by over 2 to 1, and indeed short interest is currently near its highest levels since February.
It’s admittedly difficult to advocate getting long EURUSD ahead of a critical US Federal Open Market Committee Rate Decision, but current momentum and our retail-based sentiment data favors buying recent Euro strength.
How do we interpret and trade with the SSI? Watch an FXCM Expo Presentation that explains the SSI.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
To receive the Speculative Sentiment Index and other reports from this author via e-mail, send a message with subject line “Distribution List” to email@example.com; Contact David via Twitter at http://www.twitter.com/DRodriguezFX
Meet the DailyFX team in Las Vegas at the annual FXCM Traders Expo, November 2-4, 2012 at the Rio All Suite Hotel & Casino. For additional information regarding the schedule, workshops and accommodations, visit the FXCM Trading Expo website.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.