- EURUSD – Euro Crowds Remain Short - We Like Selling Post ECB
- GBPUSD – Retail Traders Short British Pound as it Tests Highs
- USDJPY – Why Might the Japanese Yen Continue Lower?
- USDCHF – Swiss Franc Bides Time as Crowds Flat
- USDCAD – Crowds Sell into Loonie Advance - They Might be Right
- GBPJPY – British Pound Likely to Rally Versus Yen
FXCM Execution Desk data shows that retail traders remain heavily long the US Dollar (ticker: USDOLLAR) against the Euro, and a disappointment in the recent ECB rate decision suggests the crowd stands to gain on EURUSD declines.
We most often go against crowd sentiment, and the fact that crowds are heavily short EURUSD would normally lead us to go in the opposite direction and call for gains. Yet our Speculative Sentiment Index works best as a contrarian indicator through volatile FX market conditions; US Dollar volatility remains near its lowest levels in five years.
The combination of low volatility and critical downside risks to the Euro in September lead us to join crowds as they remain bearish EURUSD. And indeed, we see reason to join the crowd in buying US Dollars across other major currency pairs.
How do we interpret and trade with the SSI? Watch an FXCM Expo Presentation that explains the SSI.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
To receive the Speculative Sentiment Index and other reports from this author via e-mail, send a message with subject line “Distribution List” to drodriguez@dailyfx.com; Contact David via Twitter at http://www.twitter.com/DRodriguezFX
Meet the DailyFX team in Las Vegas at the annual FXCM Traders Expo, November 2-4, 2012 at the Rio All Suite Hotel & Casino. For additional information regarding the schedule, workshops and accommodations, visit the FXCM Trading Expo website.
