Since the Euro's double bottom in January, with lows of 12627 on the 13th and 12628 on the 17th, the market trapped shorts who were looking for the breakdown and used as fuel to squeeze above 12884 being the highs from January 13. This squeeze led to reversing the downside momentum and short covering as the market rallied through the year highs of 13085 and up to its next major resistance being 13237 from December 13 where this down leg started. After hitting this resistance of 13237 and 6 handle move off the lows, the Euro went into consolidation period, building a flag for the move from 126-132. This flag built right above the year highs of 13020-13085, being the new level of support as the year highs was conquered.
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Most recently the Euro has put in another double bottom, 13027 on February 1 and 13028 on February 6th. Once again trapping sellers who were looking for the breakdown, and coincidentally exactly 4 handles higher from the 12627/12628 double bottom just one month ago. This new bear trap is now looking to take out 13237 and continue the squeeze into a new leg higher. 13144 becomes new support off this 13028 low and the squeeze takes the first leg range of 6 handles and uses it to target 138. A break below 13028 and 12900 is needed to derail the short squeeze.
