EUR/USD: Bulls Want Breakout, Measured Move Up
Al Brooks | May 06, 2022 09:38AM ET
- EUR/USD bears completely reversed the May 4 rally that reached the 2020 low.
- While the bears did an excellent job reversing the market, the past 6 bars are still in a tight trading range, which increases the odds of more sideways trading.
- Bulls hope yesterday’s bear trend bar is just a breakout pullback of the May 4 rally and that the market will still get the upside breakout of the neckline of the double bottom.
- One can also say that an upside breakout of yesterday’s high would be a bull breakout of a bear flag and lead to a possible measured move which would project up to 1.0817. This would create a possible final flag reversal on the daily chart.
- Bears hope that the 6-bar selloff that started on April 21 will lead to a couple of legs down and reach the 2017 low of 1.0339.
- Overall, the odds favor the market reaching the March – April trading range and the April 25 high. April 25 is a likely exhaustive breakout.
- Traders should expect continued trading range price action and a possible rally over the next few trading days.
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