FxWirePro: Retail sentiment points to further downside in EUR/USD

No respite for the euro,

• The single currency has declined steadily since the U.S. Federal Reserve’s meeting in March when its breakout attempt failed at the above-shown channel ceiling.
• The euro has now declined for the sixth consecutive day as it trades below 1.12 area, we AT FxWirePro, have long forecasted the euro to reach 1.112 area to test the channel floor.

The retail sentiment currently favors the bears,

• The sentiment reports from IG Markets, which is a UK-based company providing trading in financial derivatives such as contracts for difference and financial spread betting, strongly suggest that the euro is likely to move lower.
• IG markets’ retail positions data provide a glimpse to retail traders’ positions, which are largely used a contrarian indicator since retail positioning moves in opposite direction to market movements.
• As of today, according to data from IG markets, 74 percent of retail positions are bullish on EUR/USD, while only 26 percent are on the short side, suggesting further downside possibility.