Short-Squeeze Driving Euro Higher

The inability to break the Euro overnight after a hardsell-off late in the session on Wednesday is triggering a short-squeeze thismorning. Short-traders are scrambling to cover positions as downside momentumdried up after the European Union got its act together earlier this week andannounced final plans to rescue its troubled members.

The inability to break the Euro overnight after a hardsell-off late in the session on Wednesday is triggering a short-squeeze thismorning. Short-traders are scrambling to cover positions as downside momentumdried up after the European Union got its act together earlier this week andannounced final plans to rescue its troubled members.

Technically the Euro is still in a downtrend, but a new mainbottom has been formed, creating a range between 1.2453 to 1.1876. This hascreated a retracement zone at 1.2164 to 1.2233. Based on the current upsidemomentum, this zone is today’s target.

In addition, two main bottoms at 1.2143 and 1.2153 are alsotargets, forming a huge resistance cluster at 1.2143 to 1.2164. With the main trenddown, don’t be surprised if fresh shorts get reapplied in this cluster area.Some bearish traders still believe the sovereign debt situation will get worsebefore it gets better and the Euro will eventually trade down to parity withthe Dollar.

James A. Hyerczyk has been actively involved in the futures markets since 1982. He has worked in various capacities within the futures industry from technical analyst to commodity trading advisor. Using W. D. Gann Theory as his core methodology, Mr. Hyerczyk incorporates combinations of pattern, price and time to develop his daily, weekly and monthly analysis. His firm, J.A.H. Research and Trading publishes The Forex Pattern Price Time Report... More

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