EUR/USD: Bear Breakout And Follow Through
Al Brooks | Sep 23, 2022 10:35AM ET
- EUR/USD bears got a doji bear close yesterday, which is the minimum follow though needed.
- At the moment, today is a bear breakout bar and a continuation of the bear breakout from two days ago.
- Some traders will argue that because yesterday was a doji bar, it is a pullback from the breakout on a smaller time frame; therefore, today might be the second leg down of the breakout.
- So far, this is good for the bears. However, the bears have an issue: the market is in a broad bear channel, and the bulls are making money at new lows. This increases the odds that the bulls will make money down here.
- More likely, the bears will take profits soon, and aggressive bulls will begin to buy.
- Traders want to see the resolve of the bears today. Will, the bears be able to close today’s bar on its low, will today disappoint the bears and be a reversal bar?
- The market is also at 0.9800, and buyers will be here simply because they see the market at a discount. Those investors will buy simply because it is a value play.
- Bears selling here hope this bear channel will continue lower. The bears want a successful bear breakout of a bear channel; however only a 25% chance they will be successful.
- More likely, the daily chart will begin to rally and test prior lower highs soon.
- Overall, traders will pay attention to today to see if the bulls can get a strong reversal up or if the bears can get a strong close.
- Today is Friday, so the weekly chart is important. At the moment, the weekly chart is at a low. The bulls want to reverse the market up as much as possible before the close, and the bears want to hold the price down here to get the low close on the weekly chart.
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