Forex trading crowds continue to sell aggressively into US Dollar strength (ticker: USDOLLAR) as it hits fresh multi-year highs, and one-sided sentiment favors continued USD strength versus the Euro, Canadian Dollar, Swiss Franc, and British Pound.

Our forex sentiment-based trading strategies continue buying into US Dollar and Japanese Yen uptrend across the board, and we see little reason to call for any significant short-term reversals. In fact the Dow Jones FXCM Dollar Index seems poised to register fresh peaks as long as it remains above resistance-turned-support at previous 2012 peaks near 10,100.

As with any strong currency trend there are always risks of near-term corrections. That said, we see little reason to call for any larger turnarounds as retail FX trading crowd sentiment hits the most extremely bearish US Dollar against the Euro and other currencies since the USD rallied to important peaks in late 2011.

View an FXCM Expo presentation on the Speculative Sentiment Index for better understanding on how we use it in our trading.

How do we interpret the SSI? Watch an FXCM Expo Presentation that explains the SSI.

--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com

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