As with cable, so for the eurodollar, which has also benefited from the recent volatility in the US dollar and once again caused the euro bears to be caught in another short squeeze. Last week the eurodollar broke and held above the deep price congestion at 1.3050, and clearly visible on the volume at price histogram which is shown on the left hand side of the chart.
In early trading today, the pair are now testing the subsequent volume bar which extends to the 1.3150 region, as shown by the yellow dotted line. If this morning’s price action holds, and provided it is supported by well above flows, then we should expect to see this bullish momentum continue and see the eurodollar test the 1.33 price point, and beyond in due course.
Indeed, as we can see on the volume at price bars the price congestion between the current level and the 1.34 region falls away dramatically, suggesting there is little resistance ahead. The only proviso is that the eurodollar must hold at 1.32.
By Anna Coulling