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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