EUR/USD's reverse from levels just short of a major psychological barrier will rightly worry traders who are sitting broadly long.
Speculators' main concern is profits and that should limit recoveries in the short-term nL1N2FL07W.
Speculative bets on EUR/USD's rise have surged to record levels and bets of this magnitude have a big influence on direction.
Whenever bets have grown close to the level seen today they have led to a reversal nL1N2FL08Z.
Traders are well aware of this and having seen EUR/USD peak close to 1.2000, the will to hold on to as much profit as possible should provide a significant weight.
That weight will reduce as this large bet is pared but it's likely EUR/USD will fall further before the number of bets has been sufficiently reduced to allow for a resumption of the uptrend.
Top picking, which has been a largely fruitless task since March, may now pay-off.
Stop placement just over 1.200 is a no brainer and it's relatively cheap.
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