Everybody thinks EURUSD is firmly caught in a range and they could be right. However in this market consensus is a dangerous thing
The chart below suggests that people could very quickly get “caught on the back foot” if we can see one more move higher on EURUSD
This looks like a potential replay of December 2008
EURUSD drops from 1.3081 to 1.2549 (532 points) over 8 trading days from 25 November ’08
EURUSD drops from 1.2992 to 1.2457 (535 points) over 8 trading days from 23 Feb ‘09
Posts a key day off the lows on 04 December and just misses doing the same on 04 March
Starts to rally in December as equities bounce off the lows, volatility drops, CHF crosses and JPY crosses rally…just as we are seeing now.
On the day it breaks 1.3081 (11 December) the daily range is 1.3001 to 1.3407 and it closes at 1.3355. 5 trading days later it hit the 1.4720 peak
It is not saying that a move of that magnitude and speed is necessarily about to develop but that a move over 1.2992 could catch the “range traders” on the back foot and yield a sharp spike higher.
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