Speculators loading up on short EUR contracts
Price based indicators
• FX-O-meters: AUD/USD down and EUR/AUD up are the strongest trends but also the most stretched currency pairs. Monitor closely for possible upcoming corrections. NZD/USD down is the third strongest trend and not so stretched yet – an indication of further downside potential.
• T3 signal: No signal. Weak antipodeans were behind the top tree trends this week. However as the trends have moved a bit ahead of themselves becoming overly stretched (high probability of a correction) or are too volatile (not enough robust pattern) no trades were triggered.
• Market environment: Both the average stretch-o-meter score as well as the trend-o-meter increase indicating a trending environment. The trend-o-meter average is back above 1 standard deviation which to us indicates that normal weighting to trend strategies should be applied.
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