21 June 2001, 12:26 Buy euro/dollar amid bullish technical setup
By Kira McCaffrey Brecht
Chicago, June 20 (BridgeNews) - Extreme low levels of bullish sentiment and
last week's bullish outside reversal combine for a good short-term setup on the
long side in euro/dollar, said Roman Dutkewych, technical analyst at Lehman
Brothers.
Dutkewych noted last week's bullish outside reversal week, saying
euro/dollar retreated to the 61.8% retracement of that rally around 0.8510. He
thought that this area, combined with key chart support from the June 14 low
around 0.8490, should stall losses.
In the bulls' favor, he said "trend money" was still short euro/dollar, as
measured by Commodity Futures Trading Commission commitments of traders data.
Also, he highlighted the low level of bullish sentiment, currently at 16%,
measured by Market Vane. That compares with the record low reading at 14% seen
at last year's lows, he said.
The parameters of Dutkewych's recommendations are as follows:
Buy euro/dollar at 0.8505
TARGET STOP
0.8850 0.8485
If this trade were triggered and the target reached at 0.8850, the profit
would be 4.05%, or $4,050 for each $100,000 investment. If the trade were
stopped out at 0.8485, the loss would be 0.23%, equal to $230 for each $100,000
investment.
The euro/dollar pair is traded on the interbank market, and Chicago
Mercantile Exchange Inc. also offers futures and options on the pair. Investors
interested in tracking the progress of Dutkewych's recommendation should use
BridgeStation symbol $$EURUSD.
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