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May 18 - 08:55 AM

EUR/USD - COMMENT-How EUR/USD Bulls Could Now Be Tied Up In Knots

By Martin Miller  —  May 18 - 06:35 AM

EUR/USD's strong recovery this week could be coming to an end and there are even tentative signs that spot to be set to reverse lower due to price action on the technical chart.

EUR/USD, which benefited from ECB policymaker Francois Villeroy de Galhau saying on Monday that a weak euro could threaten price stability in the currency bloc, rose further on Tuesday after hawkish comments from Dutch central bank chief Klaas Knot. nL2N2X91XR

EUR/USD on Tuesday closed above the 1.0546 Fibonacci level, a 23.6% retracement of the 1.1185 to 1.0349 recent drop, but has slipped back below it on Wednesday.
This is heightening the risk of a bull trap, which is set when a market breaks above a technical level but subsequently reverses.

Those that are bullish EUR/USD need another daily close above the 1.0546 Fibo, as this would avert the risk of a bull trap that could damage longs.
Related nL2N2X90OH

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Source:
Refinitiv IFR Research/Market Commentary

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