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US Dollar Breakdown Looks Like the Real Deal

US Dollar Breakdown Looks Like the Real Deal

David Rodriguez, Head of Product

- US Dollar breaks major lows versus Euro and nears major support

- Forex retail trading crowds have bought aggressively into Dollar weakness

- A contrarian view of crowd sentiment leaves us in favor of further declines

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

View individual currency sections:

EURUSD - Euro Forecast to Trade to Fresh Peaks; Our Systems Buy

USDJPY - US Dollar Outlook versus Japanese Yen Unclear Until This Happens

GBPUSD - British Pound Surges, We’re Bullish Above Key Highs

AUDUSD - Australian Dollar Targets Further Gains versus US Dollar

USDCHF - US Dollar May Test Major Low versus Swiss Franc

GBPJPY - British Pound Looks like a Buy versus the Yen

Weekly Summary of Forex Trader Sentiment and Changes in Positioning

ssi_table_story_body_Picture_5.png, US Dollar Breakdown Looks Like the Real Deal

The US Dollar has broken substantial lows versus the Euro and nears major price support versus the Japanese Yen and others. Why do we think it breaks lower?

Our Retail FX sentiment-based strategies have sold into USD weakness as crowds buy into the breakdown, and indeed broad outlook leaves us in favor of continued weakness.

The Dow Jones FXCM Dollar Index—a measure of US Dollar’s value versus the Euro, British Pound, Japanese Yen, and Australian Dollar—has broken convincingly below its 200-day Simple Moving Average.

Given the breakdown and a sharp shift in crowd sentiment, we see little choice but to remain in favor of continued USD weakness. Follow any future updates on retail positioning via this author’s e-mail distribution list.

ssi_table_story_body_Picture_6.png, US Dollar Breakdown Looks Like the Real Dealssi_table_story_body_Picture_7.png, US Dollar Breakdown Looks Like the Real Deal

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--- Written by David Rodriguez, Quantitative Strategist for

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