EUR/USD: Bears Testing 2020 Low
Al Brooks | Apr 26, 2022 09:28AM ET
- Yesterday closed as a bear trend bar closing on its low below the March—April trading range.
- At the moment, the market is always in short, and the bears hope today will be follow-through from yesterday’s bear breakout bar.
- Bears ultimately want to get down to the 2020 low (green line), 30 pips away (1.0636). This selloff may just be a sell vacuum test of this support level.
- The EUR/USD is close enough to the 2020 low. It will probably have to reach it before the bulls get a credible bounce. If the market does bounce before reaching the 2020 low, traders may hesitate to buy without reaching the lows. This is because traders often want to buy near to the support level, and if it bounces before it, traders may not be willing to buy until it reaches the magnet.
- There is also a measured move projection based on the March 31—April 5 bear breakout that projects down to the 2020 lows (green line).
- As strong as the bears are here, the bulls have been making money at every new low and will likely make money buying here as well.
- While the bears may get a measured move down from the March—April trading range, it is not likely. The odds are the March – April trading range will be a final flag, and the market will test the midpoint of this range soon.
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