Don’t waste your money with stop-losses. There’s no promise that you’ll like the bid you’re forced to take like the recent EUR/USD squeeze.
FXstreet.com (Barcelona) – In what seems to have been an absurdly exaggerated move up, the EUR/USD is currently trading at 1.3137 after posting a fresh 2-week high at 1.3203.
The catalyst on today’s moves is a combination of a market overly long the USD, twilight liquidity on the transition from NY into Tokyo, and obviously, Fed Chairman throwing cold water on QE taper this September, saying that inflation, jobs signal more Fed stimulus is needed, a very ‘off the cuff’ dovish remark.
In the wildest sequence of hour by hour spikes in 2013, there are some impressive facts about the latest recovery in the EUR/USD which are worth highlighting. The most impressive of all is perhaps the fact that EUR/USD has been able to master over 200 pips of gains in the last hour alone, literally needing only 5 hours of price action to erase 12 days of losses.
According to Eamonn Sheridan, Editor at Forexlive, “It is easy to say these moves are crazy, the move is stupid etc. by all means, say these things – but don’t forget to take away the idea that these sorts of moves happen from time-to-time.” Sheridan goes on saying “when you’ve been around the markets for a while they cease to be shocking.”
Meanwhile, Sean Lee, Founder at FXWW, notes “Those clever enough to have bought yesterday below 1.2800 should take their profits off the table as this is a simple case of stop-loss squeezing gone mad in thin market conditions.”