After Friday’s huge sell-off, the weakness continued in the March Euro overnight with the market piercing last week’s low at 1.3096 and negating the daily closing price reversal bottom.
The overnight sell-off came close to reaching a major mid-point but stopped short of hitting this target. Based on the 2012 range of 1.2637 to 1.3498, the first downside target is the 50 percent price level at 1.3068, followed by the 61.8 percent price level at 1.2966.
Despite the hard break, the main trend remains up according to the daily swing chart. The trend will remain intact as long as the swing bottom at 1.2985 continues to hold. Since the main trend is still up, buyers may begin to step in slightly under the 50 percent price angle at the uptrending Gann angle at 1.3027 on Monday.
Even though last week’s closing price reversal has been negated, time is still indicating that another similar bottom may form. This means that short traders have to remain alert for a possible lower-low, higher-close finish today. Since the market is nearing support, pressing the short-side too aggressively may result in getting caught in a bear trap.
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Short Euro Traders Must Avoid Bear Trap
Published 03/13/2012, 08:21 AM
Updated 05/14/2017, 06:45 AM
Short Euro Traders Must Avoid Bear Trap
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