US Dollar May Rally Further, Trading Crowd Sentiment Warns
Forex trading crowds remain aggressively net-short the US Dollar (ticker: USDOLLAR) across the board, giving contrarian signal that the Greenback can continue to recover against the Euro, British Pound, and Swiss Franc.
The clear caveat on our US Dollar-bullish forecast is that markets remain extremely uncertain, and the Greenback has traded in an increasingly narrow range against a broad range of counterparts. The difference-maker may come on price action in the Dow Jones Industrial Average and broader risky asset classes.
The correlation between the Dow and the Dow Jones FXCM Dollar Index trades at record-strength, and whether or not the Dow breaks to further lows could decide whether the US Dollar continues higher.
View an FXCM Expo presentation on the Speculative Sentiment Index for better understanding on how we use it in our trading.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.