Nearly three out of four traders short EUR/USD

Forex sentiment update

EUR/USD, GBP/USD and USD/CHF have all experienced yearlong price extremes in the past week, and trader sentiment reflects an expectation of mean reversion.

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The two week rally in EUR/USD hit 1.1200 late last week, and has stalled there since. 74% of traders believe the pair will revert back to June's prices - or lower.

EUR/USD historical prices

How client sentiment works

Client Sentiment shows the percentage of IG client accounts with open positions that are currently long or short. If the majority of client accounts with open positions are long a given market, then they expect the price to rise; if the majority is short, then they expect it to fall. (Values taken using IG's Client Sentiment measure as of the previous day's close.)

Trend followers might go with sentiment, while contrarians would tend to go against the trend. For example, a 65% long measure in EUR/USD could reflect a buying opportunity for trend followers or a selling opportunity for contrarians.

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EUR/USD sentiment - 74% short

Last week's sentiment: 71% short

This week's price action in eurodollar has seen the pair break through 1.1200 for the first time in over a year; three percent more traders are taking short positions as a result.

GBP/USD sentiment - 59% short

Last week's sentiment: 69% short

GBP/USD has come off of its yearlong high this week, and more traders believe the pair can return higher - sentiment for the pair moving 10% towards the British pound.

USD/JPY sentiment - 52% short

Last week's sentiment: 58% short

USD/JPY has spent the past week around 139.00. Down off recent highs, but still far from 2023 lows - traders are unsure about the yen's future at 52% short.

USD/CHF sentiment - 89% long

Last week's sentiment: 90% long

Traders remain overwhelmingly long USD against the Swiss franc. Long positions have exhibited patience as the pair has continued lower over the past week - trading below 0.8600 for the first time since 2015.

AUD/USD sentiment - 54% long

Last week's sentiment: 58% long

Australian dollar sentiment continues to fall - getting closer to 50/50. Traders are likely to stay split as AUD/USD continues to trade within the range of 0.6900 and 0.6600.

USD/CAD sentiment - 65% long

Last week's sentiment: 65% long

No change in Canadian dollar sentiment this week as traders weigh less-than-expected inlation data from both countries.

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.