EUR/USD traders have rushed to exit bullish positions ahead of this month's Federal Reserve policy decision, completely ignoring a powerful uptrend - and that's probably going to cost them.
Trends are traders' friends and following trends adds to the likelihood of a profit, while fighting them requires far more skill and fine timing to avoid losses.
The EUR/USD trend is particularly strong.
It began in March last year and it took 17 months for the pair to meet the minimum criterion for a technical correction of that rise in August, after which EUR/USD swiftly resumed its ascent.
However, traders have not held their bullish bets in accord with techs but instead slashed longs from $18 billion in June to just $1.5 billion at the beginning of September, following June's hawkish Federal Reserve statement that has fuelled expectations for a reduction in bond purchases this month.
Traders have since seen the worst U.S. jobs data since January and, having ignored a trend, are in a rather precarious position.
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