US Dollar Shows Little Hope of Reversal as Sentiment Extreme
- EURUSD – Euro Targets Fresh Highs Versus US Dollar
- GBPUSD – British Pound at Potential Sentiment Extreme
- USDJPY – Yen May Set Important Top (USDJPY Bottom)
- USDCHF – Swiss Franc expected to Rally
- USDCAD – Canadian Dollar Forecast to Strengthen
- GBPJPY – British Pound Declines May Continue vs. JPY
Forex trading crowds remain aggressively long the US Dollar (ticker: USDOLLAR) against the Euro, British Pound, Japanese Yen, Swiss Franc, and Canadian Dollar. Such one-sided sentiment gives us contrarian signal that the USD could continue its declines.
Traders turned aggressively net-long the US Dollar against the Euro as the pair broke above the $1.2700 mark. Consistent EURUSD selling has steadily provided us with similarly steady signal that the pair is likely to hit fresh highs.
We will keep a close eye on the Dow Jones FXCM Dollar Index for any signs of potential reversal. Yet the Dollar’s break below important support suggests that we could see fresh Greenback losses before any real chance of reversal.
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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--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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