This pair was bearish for 7 straight weeks with an overwhelmingly large number of traders going short.
Since so many traders were short this pair for weeks, the only way for the big players to make money is to go against the trend and this typically happens with news releases.
Stop losses would have been trailed/placed at the zones marked red for traders shorting the pair down from 136.500 and the big players know this. Smart money used the ECB news release on Thursday as an opportunity to buy the market up taking out all of the stop losses in the zones marked red and profiting from all the all the stop losses (buy stops) that would have been flooding into the market hence the sharp upwards move.
Price is now at a 61.8 retracement along with previous structure resistance so this pair may be ready to resume its trend to the downside to the 130.00 level as a structure level target.
Since so many traders were short this pair for weeks, the only way for the big players to make money is to go against the trend and this typically happens with news releases.
Stop losses would have been trailed/placed at the zones marked red for traders shorting the pair down from 136.500 and the big players know this. Smart money used the ECB news release on Thursday as an opportunity to buy the market up taking out all of the stop losses in the zones marked red and profiting from all the all the stop losses (buy stops) that would have been flooding into the market hence the sharp upwards move.
Price is now at a 61.8 retracement along with previous structure resistance so this pair may be ready to resume its trend to the downside to the 130.00 level as a structure level target.
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A month and 400 pips later position closed @130.10