EUR/USD: Bear Breakout, But Odds Favor Rebound
Al Brooks | Nov 22, 2022 09:28AM ET
- EUR/USD bears got a bear breakout bar yesterday. However, the bar is small and needs follow-through.
- Yesterday is a problem for the bulls, as it is the fifth bar in a bear micro channel, which increases the odds that the first reversal up will fail and lead to a second leg down.
- Bulls will try their best to prevent follow-through selling today, which would increase the odds of going sideways to up.
- At the moment, the odds favor the bulls getting a second leg up. However, traders need to be suspicious of the bulls here. If the bulls were clearly in control, they would not allow the bear trend bar to close on its low and below the past five bars.
- Traders should expect at least a small second leg sideways to expect down today to be disappointing for both the bulls and the bears.
- Bears hope this is the start of an endless pullback and reversal that will fall below the November 10 breakout.
- Bulls see this selloff over the past few days as a 50% pullback test of the November 10th low to the November 15 high.
- Overall, traders will pay close attention to today’s close to see if the bears can get a second consecutive strong bear trend bar close.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.