- EURUSD – Euro Forecast to Rally Further vs USD
- GBPUSD – British Pound Expected to Gain
- USDJPY – Yen Poised to Continue Rally
- USDCHF – Swiss Franc Forecast to Strengthen
- USDCAD – Canadian Dollar May Rally Further
- GBPJPY – British Pound Outlook Bullish vs Yen
Forex trading crowds have aggressively moved towards buying the US Dollar (ticker: USDOLLAR) against the Euro, British Pound, Swiss Franc, Canadian Dollar, and Japanese Yen—giving contrarian signal that the USD may continue recent declines.
We recently warned that the US Dollar was likely to fall further following bullish sentiment extremes. The Dow Jones FXCM Dollar index currently trades at multi-week lows, and there is important risk of further weakness.
It nonetheless bears repeating that the US Dollar holds a record correlation to the Dow Jones Industrial Average, and the next moves in the Dow and SP 500 could dictate moves in currency markets. We remain bearish the US Dollar (bullish EURUSD, GBPUSD and bearish USDCHF, USDJPY, USDCAD), but watch for big moves in stock markets.
View an FXCM Expo presentation on the Speculative Sentiment Index for better understanding on how we use it in our trading.
How do we interpret the SSI? Watch an FXCM Expo Presentation that explains the SSI.
— Written by David Rodriguez, Quantitative Strategist for DailyFX.com
To contact David, e-mail drodriguez@dailyfx.com
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