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EURUSD – Retail FX traders are once again net-short the Euro versus the US Dollar, and a contrarian view of ‘crowd’ sentiment points to further EUR/USD gains. This stands in clear contrast to just two days ago—traders had previously flipped in the opposite direction.
It has admittedly been difficult to form a lasting bias on the Euro as it sticks to a choppy range versus the US Dollar. Key resistance near $1.1185 could mark a key test for the EUR/USD, and a break higher would likely force a rally towards range highs near $1.14 and eventually $1.16. Retail trader sentiment currently favors further strength, and yet it is clear the ‘crowd’ has been quick to switch directions in just the past week of trading.
We see risks of further Euro gains in the near term, but it would take a substantive break above key resistance to call for a larger EUR/USD uptrend.
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