Euro Nears Turning Point as Sentiment Hits Most Extreme Since 2009
Continued US Dollar losses have been met with similarly aggressive trading crowd selling, giving contrarian signal to stay short the Greenback through upcoming trade. Last week we wrote that hints of capitulation warned the USD could soon reverse. Yet markets clearly had other things in mind, and short-term momentum plainly favors further US Dollar declines. Forex futures and options positioning warns of a potential Euro/US Dollar top. It is nonetheless important to stress that sentiment extremes are only truly clear in retrospect. Caution is advised against taking aggressive US Dollar bets in the midst of a strong downtrend.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.