Apparently, a number of traders were caught flatfooted by the US dollar's recent surge. As the chart below suggests, the number of Large Speculators (institutional traders) who were net long Euro futures achieved eleven year highs in April. The flip side is that this was an extreme in bearish sentiment in the Dollar versus the Euro , which was a warning. The current reversal of net long positions may get a lot deeper if the Dollar has begun a major advance.
Although we thought we might see one final low before a USD bottom, our proprietary Unweighted Major Currency Average suggests the Dollar struck a key low back in February and began a stealth recovery that's since broken higher.
There's still a possibility the wave (4) correction isn't over, but a significant advance above the wave B high would support the case for a bottom. We'll be watching.
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