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Contrarian Trade Opportunity In The Euro

Published 03/11/2015, 03:12 AM
Updated 07/09/2023, 06:31 AM
EUR/USD
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Let's face it, nobody is bullish on the euro—nobody! Even ECB President Mario Draghi probably has a secret short position in the EUR/USD in order to hedge his euro exposure from his salary at the ECB.

If the following sentiment chart could fall below 0 it would probably be at minus 50 by now:

Sentiment Indicator: Euro
Meanwhile, yesterday’s move down to the low 1.07s (at time of writing) has moved the EUR/USD pair into an area of historical support/resistance dating back to the late 90s-early 2000s:

XEU Monthly

On multiple time-frames EUR/USD has never been as oversold as it is currently. Moreover, EUR/USD is also down 9 months in a row. (Another record if it sticks.) From my perch, if there’s going to be a contrarian counter-trend long opportunity in EUR/USD before it reaches parity it’s probably going to come about fairly soon or not come about at all…

Disclosure: First published at Energy and Gold.com

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