US Dollar Might Have Set Significant Peak versus Euro Post-ECB
- Dollar surges post-ECB versus Euro but may have set a significant top
- Retail forex traders have sold into the post-ECB Euro bounce
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Weekly Summary of Forex Trader Sentiment and Changes in Positioning
The US Dollar surged versus the Euro following the European Central Bank rate decision, but a substantial shift in sentiment warns of an important EURUSD bottom.
Our retail FX sentiment-based strategies have done well buying into US Dollar strength as it reversed sharply off of multi-year lows versus the Euro. But today’s important swing in positions means that their next trades may actually be USD short orders (EURUSD, GBPUSD longs).
The next move looks critical, and it will be important to watch where the Euro/US Dollar exchange rate closes. Yet early signs favor an important reversal.
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--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.