- EURUSD – Euro May Have Set Bottom Against US Dollar
- GBPUSD – British Pound Forecast to Rally Further
- USDJPY – Yen Outlook Clouded as Dollar Strengthens
- USDCHF – Swiss Franc Shows Mixed Sentiment, Outlook
- USDCAD – Canadian Dollar Forecast to Recover vs. USD
- GBPJPY – British Pound Declines May Continue vs. JPY
Forex trading crowds have recently been buying into noteworthy US Dollar (ticker: USDOLLAR) declines, giving contrarian signal that the EURUSD may have set an important short-term bottom.
Trading crowds had previously sold the US Dollar (ticker: USDOLLAR) across the board, giving contrarian signal that the currency could continue to fresh highs against the Euro (EURUSD to fresh lows). Yet the same trading crowds are quite close to flipping net-short EURUSD and GBPUSD, suggesting that the pairs may have set significant short-term bottoms.
Monday’s session typically sets the stage for the following week of price action. The sharp US Dollar and losses into Monday’s close suggest that we could see the EURUSD and GBPUSD trade to fresh highs through end of week trade. Such seasonal analysis is consistent with a significant swing in trading crowd sentiment, and indeed we have turned bearish the US currency.
View an FXCM Expo presentation on the Speculative Sentiment Index for better understanding on how we use it in our trading.
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— Written by David Rodriguez, Quantitative Strategist for DailyFX.com
To contact David, e-mail drodriguez@dailyfx.com
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