US Dollar Shows Signs of Life as Crowds Sell Bounce
Retail forex speculators remain long the US Dollar (ticker: USDOLLAR) against the Euro and other currencies, but an important shift in sentiment serves as early warning of a potential Dollar turnaround.
We’ve recently called for continued US Dollar losses across the board as retail crowds bought into Greenback weakness. Our FXCM Execution desk data shows that the majority of traders remain long, but many are actually now selling into the Dollar bounce.
Our sentiment-based trading strategies have begun buying the US Dollar on the first signs of turnaround, but it will be critical to watch whether the USD can close above significant resistance versus the Euro and other major pairs.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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