Are You Ready for a 1000 Pip Rally in EUR/USD?

• Posted by Robert Sinn
• on June 1st, 2012

After reaching its most oversold levels since June 2010 $EURUSD has bounced ~150 pips after falling as low as 1.2287 in the minutes following the May US payrolls report. Violent 100-300 pip rallies are typical during powerful longer-term downtrends; therefore, for euro bulls to really get some traction in terms of reversing the trend we will need to see a move back above the 1.2600 level which roughly lines up with the January low at 1.2624 (orange line):

 

The current situation is made all the more interesting by the fact that currency market participants have a fresh memory of last October’s 1000+ pip rally in the euro which caught the vast majority by surprise and offsides.

 

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