There are plenty of professional traders and Algo funds in the market who look for set-ups like we are currently witnessing. The broader market is short and a clear stop-loss level gets breached, like we’ve just seen in EUR/USD. The short-term market is under pressure to cover the extra buying which has just emerged, so the professional intraday traders will add to this pressure by buying near the the break-up level with the intention of forcing more short covering. This is a very popular strategy.
Doesn’t always work in their favour of course and I’d expect to see plenty of intraday longs with stop-loss sell orders now below 1.2510.
