The extent of the decline from 1.6039 makes it unlikely that 1.5611 will hold. Expect a bounce from current levels, perhaps a spike through 1.5750 next week in order to complete a small c wave before 1.5611 is put to the test. A break below there would bring an end to the series of higher lows and puts bears firmly in control.
Positioning is neutral for most currenies, suggesting that the US dollar may continue strengthening.
Retail sentiment has once again shifted; and this time, speculative traders are positioning for the EURUSD’s long-term trend to remain intact. Over the past week, the Speculative Sentiment Index ratio jumped to its highest reading since last October - though this shouldn’t be too surprising considering the retail sector’s affinity for prominent technical levels. Today, the pair’s ratio stands at -1.59 with nearly 61% of the market group holding a long position.
In order to be an effective trader, it is important to understand how different currency pairs move in relation to each other. There are a few reasons why this is significant, but most importantly, it allows traders to understand their exposure.