Crowd Sentiment Calls for Continued Euro Strength
Retail traders remain heavily net-long the US Dollar (ticker: USDOLLAR) against the Euro and other major counterparts. Our sentiment-based trading strategies have subsequently sold into USD weakness and call for further declines.
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Our overall trading bias remains unchanged since last week—as long as retail trading crowds remain long the US Dollar, we will continue to call for further declines.
From a fundamental standpoint, the Greenback will continue to track developments in Europe, and a recent lull in market volatility suggests that the US Dollar bull run could be near an end. Viewed from a technical perspective, the dollar’s failed break higher leaves it vulnerable to further declines.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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