75% of traders long EUR/USD at 1.0500

Forex sentiment update

Strength in US dollar continues as reflected by price extremes across multiple pairs. Today, USD hit 6-month highs against JPY, GBP, EUR, CHF and AUD. Client sentiment indicates a contrarian stance, with the majority of traders anticipating mean reversion.

USD will be tested at the end of this week as GDP growth and Core PCE arrive Thursday and Friday morning, respectively.

EUR/USD price history

EUR/USD sentiment - 75% long

Last week's sentiment: 66% long

Three out of four traders are now long EUR/USD after briefly dropping below 1.0500. Prices today mark the lowest since the beginning of January.

GBP/USD sentiment - 73% long

Last week's sentiment: 70% long

A 6-month low in GBP/USD caused even more traders to hold long positions in the pair. GBP/USD dropped under 1.2200 and has closed lower every day in the past week.

USD/JPY sentiment - 79% short

Last week's sentiment: 76% short

Short sentiment grows in USD/JPY as it approaches historic highs. US dollar now trades less than 100 pips away from 30-year highs against the yen - currently around 149.50.

USD/CHF sentiment - 58% long

Last week's sentiment: 65% long

USD/CHF has closed higher 13 days in a row to reach a 6-month high over 0.9200. As a result, fewer traders hold long positions this week, though a majority still do.

AUD/USD sentiment - 82% long

Last week's sentiment: 74% long

More than four out of five traders are long Australian dollar against USD. This sentiment comes as AUD/USD hit a year-to-date low today under 0.6350.

USD/CAD sentiment - 51% short

Last week's sentiment: 52% long

Canadian dollar sentiment flips once again as USD/CAD hovers around 1.3500. 50/50 sentiment reflects price history in the pair as it trades near the middle of its year-to-date range.

*Client sentiment data as of 4:00pm ET 9/27/23

How to trade client sentiment

1. Open an account to get started, or practice on a demo account

2. Choose your forex trading platform

3. Open, monitor, and close positions on forex pairs

Trading forex markets using client sentiment requires an account with a forex provider like IG. Many traders watch major forex pairs like EUR/USD and USD/JPY for potential opportunities based on client sentiment. Contrarians might go against the prevailing sentiment in a forex pair, while trend followers might go with it.

You can help develop your forex trading strategies using resources like IG’s Trading Academy. Once your strategy is developed, you can follow the above steps to opening an account and getting started trading forex.

Your profit or loss is calculated according to your full position size. Leverage will magnify both your profits and losses. It’s important to manage your risks carefully as losses can exceed your deposit. Ensure you understand the risks and benefits associated with trading leveraged products before you start trading with them. Trade using money you’re comfortable losing.