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Forex pairs in this Article » EUR/USD (Barcelona) - Goncalo Moreria CMT, Technical Analyst notes that the latest data for the Currencies Forecast Poll, released by FXStreet on Friday, shows a renewed extreme imbalance between the number of forecasts considered bullish and bearish in the EUR/USD with a time horizon of one week.

Key Quotes

“Most participants coincide in the vicinity of 1.3500 with their future views, only 40 pips below the week's close, representing a small deviation from the actual price action. The interesting point to look at is the mode which was kicked back from the 1.3750 the week before to 1.3500 this week, which can be seen as a bearish bias resulting from a certain disappointment.”

“Dispersion measures are at its historical lows. This can be interpreted as an increased consensus about what the market will do this week, which is to go South. The lower close on Friday surprised some poll participants who, just one week ago, showed some complacency with the higher levels in the EUR/USD. This surprise and change of opinion convinced almost everyone that the euro should print lower by end of this week.’

“Long-term forecasts are, as usually, skewed towards lower prices. 75% of poll participants are negative on the euro with a median forecast of 1.33 which by the way seems to be a kind of average support since the 18th September, the day the euro decisively punched through the 1.3450 level with a plus 200 pip daily range. Later on, from the highs of 1.38/39, long-term forecasts have been decreasing.”

What does this mean for traders? This is perhaps one of those moments one has to take off the contrarian's hat and go with the flow. The near extreme positioning of the poll is statistically speaking not at extremes when examining the finer details.”
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