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Forex Analysis: Trading Systems buy Euro versus US Dollar
EURUSD - Retail forex trading crowds remain heavily long the US Dollar (ticker: USDOLLAR) versus the Euro and other major counterparts, and a contrarian view of crowd sentiment favors continued EURUSD gains. Indeed, the FXCM Speculative Sentiment Index for the Euro stands at -2.3 as there are 2.3 traders short for every long.
Trade Implications – EURUSD: One of our sentiment-based trading strategies has most recently bought the Euro from $1.3323 with a trailing stop at the 24-hour low at approximately $1.3270. A noteworthy jump in FX volatility suggests the trade has a reasonable chance of success. , but it will be important to watch whether the Euro can clear recent reaction highs at the psychologically significant $1.34 mark.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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