We’ve seen some extreme moves in Euro sentiment over the past few weeks. These large changes in perspective tend to offer unique opportunities for longer-term traders – let’s take a look at the data and see what we can expect from the Euro in the coming months:

  • Euro sentiment decreased from 85% to 27% Bulls between 05/15/15 and 05/26/15
  • Since 2006, Euro sentiment decreased >40% Bulls over seven trading days twice
  • Those dates were: 10/06/08 and 11/30/10
  • Each time, EUR.USD increased at least +12% over the following 12 months
  • Odds favor the EUR.USD to trade above 1.2200 by 05/26/16

In our view, longer-term traders should consider getting long EUR.USD and add to the position on any weakness over the next few weeks.

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