EUR/USD: Bounce Likely
Al Brooks | May 31, 2023 09:26AM ET
- The EUR/USD has been in a tight bear channel for the past month.
- The market is getting close to support, which increases the odds of a bounce and a couple of legs sideways to up.
- Bears got trapped selling around the March 17th high, and the market is currently testing that same price level.
- Traders will wonder if the market will rally from this same price level as it did around March 17th. The bears who sold at this price level were disappointed with the follow-through and were likely forced to buy back shorts. The bears will be cautious about selling at the same price level (March 17th).
- The bulls hope that the market is forming a parabolic wedge bottom. However, most parabolic wedges are minor reversals. This means that the best the bulls can hope for is sideways to up. It’s possible that the market will get a strong reversal up. However, it is not likely.
- The bulls need a decent trendline break of the tight bear channel and a retest of the May low. That would create a more credible bottom. This means that the odds favor sideways for the next couple of weeks.
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.