US Dollar to see Further June Lows as Crowds Change Direction
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Last week we wrote that the US Dollar was poised for fresh highs into the final moments of May, and indeed the EURUSD subsequently set fresh multi-year lows. Yet an important shift in forex retail trader sentiment suggests that the Euro may have set its June low on the first day of the month. This is consistent with a seasonal tendency for currencies to make highs/lows at the beginning and end of every month. The same trend played perfectly in May; the EURUSD high was set on May 1 and the low on May 31.
A substantial shift towards retail crowd buying of the suddenly downtrodden US Dollar suggests history may repeat itself, and indeed we see scope for further EURUSD gains within a larger downtrend through the coming week of trading.
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--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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