Everyone longing this Euro rally is walking straight into a trap

[Vannaca]

Seeing the dollar dump today while PPI came in steaming hot is honestly blowing my mind. Euro bulls are popping champagne over its best day in two months, but are we seriously looking at the same macro picture here, mates?

The bond market rallied and dragged DXY down, sure, but acting like sticky inflation suddenly doesn't matter feels like pure delusion. The Fed isn't going to turn ultra-dovish when producer prices are heating up. Meanwhile, the Eurozone economy is basically running on fumes, yet retail is already getting massive FOMO and longing EUR/USD like we're headed straight back to the highs.

Ngl, this entire move smells like classic exit liquidity to me. The bond rally feels like a massive squeeze, dollar bears got way ahead of their skis, and smart money is probably just waiting for this bounce to lose steam so they can short EUR right back into the dirt. I'm fading this move the second price action stalls.

Are you guys actually buying this Euro breakout, or are you preparing to short it into oblivion?

 

[Mason Brooks]

I’ve been watching the price action all morning and honestly, the bulls look exhausted. Everyone is so obsessed with catching that breakout that they’re completely ignoring the massive overhead resistance and the potential for a liquidity sweep. I'm keeping my sizing tight on any short entries here because the market loves to stop everyone out before making the real move. If you're going long, you better have your stops locked in, because this rally feels like it's built on nothing but hopium and over-leveraged retail accounts.

 

[Liam Walker]

@Mason Brooks you’re spot on about the retail hopium, but you’re still thinking too conventionally. Everyone is looking at that resistance level, which is exactly why the market is going to smash right through it. The "liquidity sweep" you're talking about is just the fuel they need to squeeze every last one of you shorts out before the real trend even starts. I’m fading the fade. Long and strong, and I’m loving how much you guys are panicking about it.

 

[JulianCraft]

[QUOTE="Liam Walker, post: 3981]The "liquidity sweep" you're talking about is just the fuel they need to squeeze every last one of you shorts out before the real trend even starts.[/QUOTE]

Man, I wish I had your optimism, but you're completely ignoring what the Fed is about to do. Inflation prints aren't cooling down the way the market keeps desperately hoping, and Powell is not pivoting anytime soon.

Longing euros right here with sticky inflation and the ECB running out of road just feels like begging to get liquidated. Good luck squeezing anyone when liquidity is drying up everywhere.

 

[Owen Carter 27]

[QUOTE="JulianCraft, post: 4040]Longing euros right here with sticky inflation and the ECB running out of road just feels like begging to get liquidated.[/QUOTE]

Spot on, Julian. Everyone's so focused on chasing the green candles that they're totally ignoring the daily resistance level sitting right above us. Look at the wicks on those last two candles—buyers are clearly running out of steam. I'm just sitting on my hands waiting for a solid pin bar or engulfing candle to show rejection before I look for a short setup.

 

[Noah Vance BR]

[QUOTE="JulianCraft, post: 4040]Longing euros right here with sticky inflation and the ECB running out of road just feels like begging to get liquidated.[/QUOTE]

Spot on, Julian. Fundamentals are screaming short here anyway. Backtested this exact setup over the last five years and trying to front-run the ECB pivot right now has a terrible risk-to-reward ratio. Just waiting for a clean rejection candle on the daily before I scale in.