Sept 21 (Reuters) - The bullish EUR/USD trend is developing nicely with the pair currently undergoing a much needed but modest correction which should prove positive for the uptrend.
EUR/USD lost momentum after July but traders continued to buy aggressively, boosting a big bullish bet to a record bet.
That situation needed some adjustment and there has been some correction but the pullback is yet to reach the level where traders should consider buying again and the number of longs is still very high.
To fulfil the minimum objective for a technical correction of EUR/USD's rise from June's low at 1.1168 the pair must trade 1.1691. Traders sitting long clearly don't want to see the pair drop but the reality is that a drop will help. Corrections are a good thing and the minority of traders who have anticipated the drop can re-buy and improve their positions significantly .
The 55-DMA at 1.1723 and daily Ichimoku cloud 1.1542-1.1709 add to the likelihood of strong support around the correction objective.
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(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.