EUR/USD: Euro Forecast Versus us Dollar

26/07/2010 13:23:00

The ratio of long to short positions in the EURUSD stands at 1.36, near58% of traders are short. Yesterday, the ratio was at 1.27, 56% of open positions were short. Long positions are 20.9% lower than yesterday and 7.9% weaker since last week. Short positions are 15.3% lower than yesterday and 23.5% weaker since last week. A noteworthy US Dollar decline has been met with aggressive forex crowd buying, giving contrarian signal to go short the USD versus the Euro, GBP, JPY, CHF CAD. This is a considerable shift from just yesterday when early signs of a turn in sentiment hinted that the Greenback could stage a bigger reversal versus major counterparts. Given such sharp choppiness in forex markets our forecasts have been admittedly inconsistent, and there is risk that current US Dollar tumbles will come to an abrupt end. Yet declines have been met with aggressive crowd buying, and such crowd reactions often precede a continuation in trend-pointing to US Dollar losses.