For the last few weeks we’ve been talking about the potential for the Euro to get decent rally going from down here. But we’re still waiting to see a confirmed breakout above some key levels. The good news is that we keep testing, and the more tests of resistance, the better our chances (see here for more on the Euro).
One of the catalysts that can take the Euro a lot higher would be a big sell-off in the US Dollar Index. Among other reasons to be cautious here in the Dollar is the unsustainable amount of bulls out there in this space.
According to Chris Kimble at Kimble Charting Solutions, the Public Opinion of the US Dollar recently hit extremes in bullishness. Current Bull sentiment stands at 81% while price is near the top of a (typically bearish) rising wedge pattern.
I think this chart tells the story nicely. The price up top and sentiment is plotted down below:
I’d be scared to death if I was long US Dollars (or short Euro)
Tags: $UUP $USDX $DX_F $FXE $EURUSD