EUR/USD: Bear Reversal Attempt, Deep Pullback Likely
Al Brooks | Nov 21, 2022 09:37AM ET
- The EUR/USD is attempting to get a reversal up the upside breakout on November 11.
- More While the bears are trying hard to get a 5-bar bear micro channel and have today close on its low, more likely that today will disappoint the bears.
- Assuming today closes near its low, while it would be disappointing for the bears, the market would likely need one more bear bar to convince traders the market is Always In Short. Bulls will try their best to create a big tail on today’s bar.
- November 15 was a warning that bulls were scalping out and more interested in buying a pullback, which is happening right now.
- Traders need to remember that the market is in a trading range, which means the bears have a reasonable argument for a successful reversal.
- Bears want today to close on its low and to have strong follow-through selling tomorrow. Next, the bears want a test of the November 10 bottom of the breakout.
- Bears see the November 11 breakout as a second leg trap, where the first leg ended on October 27. Note you the first push-up to October 27 is a nested two-legged move (October 4 and October 27).
- Overall, traders will pay close attention to today. If today has a big tail, it will increase the odds that this is just a pullback in the bull rally.
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