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EURUSD –The Euro continues to tumble versus the US Dollar, and heavily one-sided retail FX trader sentiment suggests it will likely continue to fall through the foreseeable future.
Trade Implications – EURUSD: Our trader sample shows that ‘the crowd’ was recently near its most net-long EURUSD since it traded below $1.30, and a contrarian view of popular sentiment keeps us watching for further weakness.
It is worth noting that short interest is actually up 21 percent on a week-over-week basis; many traders have capitulated into the clear downtrend and are now selling into weakness. Yet we would need to see a more substantial shift in sentiment before calling for any meaningful reversal amidst such strong momentum.
See next currency section: GBPUSD - British Pound Likely to Depreciate through Near-Term Trading
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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