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We Look for Trading Opportunities on a Busy Week for Forex Traders

We Look for Trading Opportunities on a Busy Week for Forex Traders

David Rodriguez, Head of Product

Our sentiment-based strategies have done well selling the Euro, but here’s why we think chasing weakness might not be the best idea—particularly against the Australian Dollar.

View individual currency sections:

EURUSD - Our Strategies Sell Euro, but Careful Chasing Weakness Here

GBPUSD - Retail Crowds a bit Too Enthusiastic to Buy GBP at These Levels

USDJPY - Japanese Yen Forecast is Bullish, but What of Trade Setups?

XAUUSD - Caution on Chasing Gold Gains as Crowds Buy

SPX500 - SPX500 Seems Unstoppable as Crowds Massively Net-Short

AUDUSD - The Facts Change on Aussie Dollar - We’ve Got to Change

Weekly Summary of Forex Trader Sentiment and Changes in Positioning

ssi_table_story_body_Picture_12.png, We Look for Trading Opportunities on a Busy Week for Forex Traders

It’s been a busy week for our sentiment-based trading strategies, as our volatility-friendly Breakout2 system did well selling into the Euro breakdown versus the US Dollar, Australian Dollar, and Japanese Yen. We wrote earlier in the week that we liked the EUR breakdown trades as long as it remained below $1.2880, but the fact that key Euro crosses are trading near critical support warns against chasing recent weakness.

The Euro has been the main attraction as most other pairs have consolidated, but a key shift in Australian Dollar sentiment led our sentiment-based Momentum2 system to sell and completely shifted our AUDUSD trading bias. Past performance is not indicative of future results, but said system has caught a number of key turning points in the AUD through recent history. The fact that it lines up with our technical trading bias lends further weight to our shift towards calling for AUDUSD weakness.

Download eight years’ worth of SSI data via this link.

ssi_table_story_body_1a.png, We Look for Trading Opportunities on a Busy Week for Forex Traders

View how to automate the high-volatility Breakout2 Trading System via our previous article and webinar recording.

Auto trade the trend reversal-trading Momentum2system via our previous article and webinar recording.

Trade with strong trends via our Momentum1 Trading System and view an archived webinar

Use our counter-trend Range2 Trading system and view an archived webinar guide on automation

ssi_table_story_body_Picture_13.png, We Look for Trading Opportunities on a Busy Week for Forex Traders

--- Written by David Rodriguez, Quantitative Strategist for

To receive the Speculative Sentiment Index and other reports from this author via e-mail, sign up for his distribution list via this link.

New to FX markets? Learn more in our video trading guide.

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.