A market maker "Fears Squeeze Higher"? Come on. That is a market maker preparing the market for yet another position. They can not scamm anybody else but retail traders and this is the way they do it : false information. Same as ECB, FED, BOE, SNB ...
RSI is a momentum indicator not a trend indicator for gods sake. See what was it indicating on the first (the biggest fall)
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It is "Mission Accomplished" for BofAML's Macneil Curry's EURUSD short. Thanks to Draghi's moar-negative-rate-cut, EURUSUD pushed through Cury's objective and we note has now stabilized at 14-month lows around 1.30 the figure. Curry's fear now, given the extremes in sentiment and positioning, is that EURUSD squeezes notably higher.
Via BofAML,
Closing our €/$ short position
We are closing out our €/$ short position, as the pair has reached our downside objective of 1.3104. On Jul-08, we recommended going short €/$ at 1.3594, targeting 1.3104. This target has been hit and we therefore close out the position.
Now, momentum and sentiment have reached bearish extremes which have often preceded a turn higher.
Specifically, daily RSI has reached its lowest levels since 2Q12, while the DSI (Daily Sentiment Index) has reached 6% bulls, the lowest since July'13 (see chart on page 2). These conditions make the potential for a technical squeeze/correction higher too large to ignore.
However, we must stress that a €/$ bounce must be seen as corrective/ temporary and ultimately an opportunity to re-set shorts for 1.2787/1.2694 and potentially below to the 1.22/1.18 area