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EURUSD – Explodes Higher Off Key Support Post ECB | Mar 10
EURUSD – Explodes Higher Off Key Support (1hr chart)
The ECB surprised most analysts and traders today initially by cutting rates which caused the pair to nosedive about 150 pips in an hour.
However, during the ECB presser Draghi said future rate cuts is unlikely, and a rapid reversal ensued launching the euro almost 400 pips higher.
To contrast, for the history of the Euro, anytime we’ve seen a 1%+ move downward intra-day on the EURUSD, we’ve never had a positive reversal like today (~3.2%), so this move is unprecedented to say the least.
From what I’m seeing on the institutional side, most banks and traders were caught off guard by this with most making the wrong call staying and being short. So if you were confounded by this move, you aren’t alone and I’m sure there are many miffed institutional traders out there at the moment.
Regardless, the key is what we do now and what is the price action + order flow telling us.
Generally large artificial moves like this aren’t going to have a large order base below them now, so an impulsive sell off could lead to a really strong move since there would be a liquidity vacuum underneath.
I’m not currently looking to get long on this pair, but I am looking to get short higher up as strategically and technically I don’t see the picture changed that much.
The Euro has been in one large 1000 pip range for almost 1+ years, and I don’t see that changing from today.
Hence I’m looking to sell between 1.1360 and 1.1450 keeping a MT bearish bias while below 1.15 on a daily closing basis.
Bulls looking to get long will want to examine 1.1045 and 1.0825 which has a solid base MT.
NOTE: The spike low literally stopped on a dime at the March lows and ST key support level at 1.0825 before launching higher.
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