- EURUSD – Forex Traders Flip, Euro Likely to Gain
- GBPUSD – British Pound Forecast Remains Bearish
- USDJPY – Japanese Yen to Continue Rallying
- USDCHF – Swiss Franc Forecast Turns Bullish
- USDCAD – Canadian Dollar Outlook Positive
- GBPJPY – British Pound Forecast to decline vs. Japanese Yen
Forex trading crowd sentiment has favored US Dollar (ticker: USDOLLAR) gains against the Euro and other key counterparts for some time now, but a significant shift suggests that the EURUSD may continue to rally as the Greenback pulls back across the board.
Yesterday we highlighted the fact that FX Options sentiment remained at major extremes for the EURUSD and AUDUSD—pointing to significant corrections. Obviously we couldn’t have predicted that coordinated central bank intervention would force the Euro significantly higher, but a more recent shift in SSI suggests that the rally could be sustained.
The only caveat remains that the correlation between the Dow and the Dow Jones FXCM Dollar Index trades at record-strength, and whether or not the Dow continues recent strength could decide direction in US Dollar pairs. As it stands, sentiment broadly favors US Dollar weakness—especially against the Euro, Japanese Yen, Swiss Franc, and Canadian Dollar.
View an FXCM Expo presentation on the Speculative Sentiment Index for better understanding on how we use it in our trading.
To get on the mailing list for the SSI and other reports from author David Rodriguez, e-mail subject line “Distribution list” to drodriguez@dailyfx.com
How do we interpret the SSI? Watch an FXCM Expo Presentation that explains the SSI.
