Many EUR/USD traders betting on a rise have held longs throughout a four-month consolidation, and they are likely to be rewarded for their patience.
For bulls, it's encouraging that this consolidation has unfolded at an elevated level.
The low point was earlier this month, at 1.1602, 46 days after the pair reached the 2020 peak at 1.2014.
It represents a 9% gain from the 2020 low.
There has only been a minor correction of the March-September 1.0636-1.2014 rise with 23.6% of that rally being 1.1689.
The 38.2% retracement, which is the minimum objective for a technical correction, is lower at 1.1488.
This consolidation unfolded with traders holding a massive amount of bets on a rise, which reached a record high just before the Sept.
The number of longs even exceeded the maximum number of shorts in the euro zone crisis.
A close above 1.2020, the monthly cloud top, should trigger a new bullish phase with potential for 1.2852.
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