Chances building of a Euro short squeeze : by Jim LangLands

The Euro has continued to stabilise today, as traders lock in profits on short positions ahead of the weekend and with one eye on next week’s FOMC meeting.

Today we get the US retail sales which will cause some volatility but ultimately I suspect we are in for more of the same, with the chance of another squeeze higher should the reverse head/shoulders play out, as we discussed yesterday.

The neckline of the S/H/S is at 1.2950, and while below there it could be that the downside reasserts itself, but a break higher would take the Euro back to the session highs (1.2952) and then beyond, towards the 200 HMA now at 1.3030 and then on to the S/H/S target at 1.3060, where the descending trend and Fibo resistance would probably cap it (1.3057:23.6% of 1.3700/ 1.2958) and provide another sell opportunity.

On the downside, below 1.2900 and then below yesterdays low at 1.2888, would head back to the trend low at 1.2858. I am not sure that we see it down here today, but if wrong, as we said before, there really is not a lot to stop it heading to 1.2800 and then to the target area of 1.2780 (major rising trend support; from July 2001) which comes just ahead of the 9 July 2013 low at 1.2754.

Look for a session of choppy sideways trade, with the chance of some more position squaring ahead of the weekend which could take the Euro a bit higher, but the overall trend remains undoubtedly lower and 1.2750 could be seen next week if the Fed take a more hawkish outlook on the economy.

Economic data highlights will include:

EU Employment Change, Industrial Production, US Retail Sales, Business Inventories, Rts/Michigan Consumer Sentiment Index.

Meta Trader – AxiTrader EUR/USD: 4 Hour



The post 12 Sept. Chances building of a Euro short squeeze appeared first on FX Charts Daily.

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