Dislikedscrewed? the prudent buyer waited for the retest of 3230 and didnt just jump in earlier. there is no shame in going with the trend as long as you do it with care.Ignored
there's nothing prudent in this environment...extreme irrationality wins. I say irrationality because right now it's a 100% technical market. And technical analysis holds a zero contribution to efficiency which is why the financial markets exist in the first place. Period.
In euro, 8 consecutive up days (well, pretty much) with 400 points and no retrace. Nothing to do with the fundamentals. Discretionary retail traders try to pick a top and use a buy stop loss 10-30 pips above into the new high which is the catalyst for short term algo buying and liqudating into them. In theory, this could last forever. IF, the stupid retail would collectively use low leverage, remove their stops and step away from the computer the market would immediately reverse course and start targeting the dip buyers. Fortunately or unfortunately this is not the case today nor will this mindset change in the foreseeable future.
This current extension of move is driven by NEW WEAK sellers at every new high who use close by stops. It takes fckton of money (a.k.a the fundamental traders) OR the lack of new weak sellers to reverse the short term higher high - higher low picture. Unless either of those happen, it can rally forever...It's not a rational market nor a rational rally but occasionally it keeps happening over and over again...for reference, look E/U chart on Oct 2011 (after the rally, market reversed course and dumped almost 600 points in 3 days), Feb 2012 and Sept 2012...If all those were rational movements then how could the market dump 400-500 pips on average only in a couple of days ?
Again, just because it's irrational, it is so only fundamentally, and it doesn't mean it must reverse course immediately...It could easily extend to 1.34 and above...at this current point it's all Greek to me!
PS. Some of the strength in the eur and gbp market can also be due to the awakening of the jpy carry trade which has increased demand for those currencies.