As we have seen in recent months, price is all important in FX trading. Pairs can move 5, 10 or even 20 big figures when a market gets oversold or overbought and sentiment swings around. The EUR/JPY move from 115 to 135 being a good example.
Last night it was the turn of the bulls to get caught out. The AUD/USD has jumped from .62 to .77 in a relatively short space of time. Such moves are unsustainable and must let off some steam. The EUR/USD has been less dramatic, but has still jumped from 1.27 to 1.37 and is also ripe for a correction.
What we saw last night is the beginning of a corrective phase, but it is still a corrective phase. EUR/USD is headed higher so buy those dips back into the 1.32/33 handle for the next big move higher.
