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EURUSD – Retail FX traders have sold aggressively into recent Euro strength, and a contrarian view of crowd sentiment suggests the pair could trade into fresh monthly peaks.
Trade Implications – EURUSD: Last week we highlighted a potential retail sentiment extreme as a key reason the Euro may bounce; the trading herd was extremely long EURUSD and one-sided positions pointed to a reversal.
Now crowds have sold aggressively into the Euro rally, and it seems likely that the pair continues onto test recent highs near $1.3675. A break above the June high would shift our overall bias in favor of Euro strength.
See next currency section: GBPUSD - British Pound Could Rally into $1.7300