Why do markets bounce when they get close to stop-loss orders but don’t trigger them. Because interbank dealers have sold ahead of the orders in order to make room for the euros they would have to buy if the stops were triggered.
That’s how they avoid slippage when it comes time to fill stops. When the stops are not triggered, they have to scramble to cover shorts. That’s why we’ve bounced to 1.3745 thus far.
