US Dollar to Gain as Sentiment Shifts on Dow Tumbles
* Negative ratio indicates net short
Dow Jones Industrial Average tumbles have led to significant US Dollar (Ticker: USDOLLAR) gains, but retail trading crowds have sold the Greenback into strength. Our Speculative Sentiment Index gives contrarian signal that the USD will likely trade higher.
With the exceptions of the Japanese Yen and Swiss Franc, all of our US Dollar pairs show that traders have grown aggressively net-short the USD through recent trade. The consistent and broad shift in sentiment warns that the previously-downtrodden US currency may have set an important bottom through recent price action.
Indeed, forex futures and options sentiment favors US Dollar gains as stock markets fall sharply.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.