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Sep 14 - 05:55 AM

EUR/USD - COMMENT-Many EUR/USD Traders Don't Care What ECB Does

By Jeremy Boulton  —  Sep 14 - 04:10 AM

Many EUR/USD traders don't care what the European Central Bank does at Thursday's meeting because they are focused on their charts which currently paint the euro in a bullish light.

Those trading EUR/USD know the trend is their friend, and following a rise from 0.9528 last September that reached 1.1276 in July - that trend is up.

For traders to change position EUR/USD must break important levels and while the ECB could be the spark that leads to that happening, tech traders care about levels - not the reason why they are traded.

In that regard some important levels that supported the accumulation of long positions have been broken with drop below the 200-DMA at 1.0828 followed by a drop under the 100-WMA at 1.0741.

Selling following these breaks has seen longs pared by 7 billion dollars and Friday's IMM data may reveal a bigger reduction in the remaining 18 billion dollars of bullish bets.

The fewer bets on a rise, the less restraint on the uptrend, and because dips have been shallow all year - falling short of targets for mininum tech corrections - the will to gamble on bigger gains remains strong.

September's low is a substantial step up from the 1.05-1.10 range trading before July, and there is a good chance that the July-Sept drop, which resulted from an overbought situation, may be the foundation for a bigger rise.

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary


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