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US Dollar Setting up for Major Reversal - Here's What Could Confirm

US Dollar Setting up for Major Reversal - Here's What Could Confirm

2013-10-03 15:00:00
David Rodriguez, Head of Product

- Forex trading crowds remain aggressively long the Dollar across the board

- Sentiment extremes warn of potentially significant turnaround in price

- Reversals are only clear in hindsight, we’re watching these key factors before buying

Receive the Weekly Speculative Sentiment Index report via PDF via David’s e-mail distribution list.

View individual currency sections:

EURUSD - We Want to Sell Euro but Need Two Things to Happen

USDJPY - Dollar at Make-or-Break Levels versus the Japanese Yen

GBPUSD - British Pound Refuses to Turn Lower - Here's What We’re Watching

AUDUSD - Australian Dollar Downtrend Intact - When is the Next Trade?

USDCHF - US Dollar at Potentially Significant Turning Point versus Swiss Franc

SPX500 - S&P 500 Outlook Hinges on Crowd’s Next Moves

Weekly Summary of Forex Trader Sentiment and Changes in Positioning

ssi_table_story_body_Picture_17.png, US Dollar Setting up for Major Reversal - Here's What Could Confirm

The US Dollar trades at major lows across the board, and extremely one-sided retail forex sentiment warns of a potential extreme in both price and positioning. Or in other words: the USD could bottom near here.

The key term is “could”, and we need to protect against getting blindly long without concrete signs of reversal. Indeed we’ll be watching retail trader sentiment very closely for early signs of reversal.

Potential reward is significant on US Dollar long positions, but we’ll avoid taking outsized risk absent evidence of a major turnaround. See the above links for full currency-by-currency rundowns, and follow future updates on retail sentiment and our trading strategies via my e-mail distribution list.

ssi_table_story_body_Picture_16.png, US Dollar Setting up for Major Reversal - Here's What Could Confirmssi_table_story_body_Picture_5.png, US Dollar Setting up for Major Reversal - Here's What Could Confirm

Automate our SSI-based trading strategies via Mirror Trader free of charge

--- 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.

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