Euro Expected to Rally Further versus Downtrodden US Dollar

Technical Analysis

Euro Expected to Rally Further versus Downtrodden US Dollar

EURUSD: Retail trader data shows 27.8% of traders are net-long with the ratio of traders short to long at 2.6 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.06163; price has moved 5.4% higher since then. The number of traders net-long is 7.5% lower than yesterday and 8.8% lower from last week, while the number of traders net-short is 1.4% higher than yesterday and 4.3% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger EURUSD-bullish contrarian trading bias.

See next article in this week’s report: GBPUSD – British Pound Forecast May Change on Trader Sentiment

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DailyFX – Technical Analysis

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