EUR/USD will probably reach the 1.25-1.26 objective early next year, but it's likely to stop there, too.
A correction from that point is fairly predictable; it's been seen before.
Positioning is key.
In August, speculators established a record bet on EUR/USD rising, so it stopped and months of consolidation unfolded before the pair rallied.
The speed EUR/USD has risen ahead the December ECB meeting suggests that bullish targets could be met sooner than expected, but it would probably fuel lots of spec demand too.
In this stimulus-enriched environment, longs could easily hit a new high.
Large spec bets have halted every major EUR/USD move in history, and the aftermath of 2018's rally offers insight into a future correction.
Between November 2017 and February 2018 EUR/USD rallied from 1.1558 to 1.2556, compared with 1.1602-1.2177 November-December 2020.
Minimum and maximum correction targets from 2018's peak were 1.2173 and 1.1790.
Next year, a retreat from 1.25-1.26 would ideally reach the 1.2173 area and rebound but mustn't go below 1.1790.
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