EUR/USD – New Swing High On The Daily Chart
Yesterdays profit taking came to an end early this morning and the market has now climbed higher past the old high seen on the daily chart.
When the profit taking ended the market set off on a run higher which not only broke the high made yesterday, but also the daily swing high which formed back in November. Opportunities to get long were limited, but there was a chance to get into the upmove from the bullish stop run pin found near the bottom of the swing up.
When the market began moving up after the drop, retail traders started to place long trades. The place where these traders would have put their stop is at the 1.13100 level as it’s the nearest round number and it falls inline with the closest low. When the market opens at 08:00 the banks need to get buy positions placed into the market, the only way to achieve this is if other traders are selling so what they do is take a small bit off profit off their trades, enough to consume the current buy orders coming into the market from the retail traders who are buying on the move up.
When the orders are consumed the market drops and breaks just below the round number