Update on my SECULAR EUROUSD Short. After having clearly failed to break the secular downtrend channel at 1.2500 I continue to stress that EURUSD is overbought, both technically and by the record number of long option contracts. Please do not get caught long EURO and continue to sell on bounces. I trade it daily and been trading it for ages, obviously I rely on technical indicators as per my previous comment. But market psychology and behavior is as much important. We have a situation where nearly everyone is on the same side, long euro, and since hitting 1.2500 every time the chart highlights a buy signal the EURUSD fails to reach its short term target, then price suddenly reverse: we have a series of constant false breaks towards the upside...This is a clear sign everyone is trying to get out of longs (while many still hold their position....so capitulation still ahead). Lets now talk about levels. 1.2200 nest support and target. But where I will first close my short is 1.2085 (Previous door to 1.2500 and now trap for 1.1500) where I believe we have a major support and will not go short again until we close 2 consecutive days below 1.2085. In the meantime I stress you to not buy EUR and sell only on pullbacks. But then again you do what you want :-)..this is my personal opinion. On the short Picture I think we will see some buying at 1.2200, mostly fueled by short term traders. The EUR attempted and failed to correct the 1.2500 -1.2300 drop: when pulling a classic Fibonacci Retracement indicator and the cross fails to retrace more than 25%, the market is clearly trending (downwards in this case) and further losses are to be expected. Again from a behavioral perspective this means longs are trying to get out of their positions and the more time passes the more they are willing to accept lower prices, this before the obnoxious ones, who fail to accept the bear market, will capitulate.
PS; By tomorrow I will also publish on my blog theforecaster.eu
PS; By tomorrow I will also publish on my blog theforecaster.eu