EUR/USD traders could make a lot of money following a simple rule that the trend is their friend and utilizing the steep downtrend that's being driven by changing U.S. monetary policy.
Those who have already done so could have seen immense profits that would be boosted by the widening U.S./eurozone interest rate gap that pays those holding dollars handsomely.
Since taper talk emerged last year EUR/USD has fallen from 1.2266 to 0.9901.
The interest rate divide has grown with the one-year forward swap 253 pips from 90 pips in May last year.
The technical downtrend is very strong and it's not inconceivable that a trader sheltering stops above the 55-DMA could have remained short since February when EUR/USD was above 1.1300.
The reluctance of EUR/USD traders to join the trend has added to its resilience.
It took months for traders to unwind bets on a rise and they have never ventured into a big short position.
Instead there has been a resilient will to bet on rallies, ignoring the trend to take the long odds of a much less likely eventuality that has instead seen their stops fuel the drop.
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