Credit: REUTERS/© Kacper Pempel / ReutersSept 23 (Reuters) - EUR/USD has reached a point where longs should be considered, but it may have reached that point at the wrong time .
For traders, timing is key. Having the right idea means little if you time your trade badly. Those who see 1.1691 as a good point of entry for EUR/USD longs are correct. At that point, the pair will have fulfilled the minimum objective for a correction of the rise from June's low at 1.1168.
So from a technical standpoint, it's a good spot to buy. But there are others factors. Recently, longs hit a record level and while they have been trimmed, they remain large and therefore will drag on EUR/USD.
There is also a clear rise in risk aversion alongside growing concern about the impact of a second wave of the coronavirus .
When risk aversion rises, traders usually trim bets, heightening the probability of a deeper correction. Ideally, EUR/USD would reach 1.1488 or 38.2% of its 20020 rise before rallying.
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(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)
((jeremy.boulton@thomsonreuters.com))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
