EUR/USD: Buyers Lurk Near March 24 Low
Al Brooks | May 26, 2023 09:25AM ET
- The EUR/USD went one pip below the March 24th low before reversing up 40 pips.
- The market will probably fall further below the Mach 24th low. This was the bottom of a prolonged bull channel, so the odds favored buyers in this area.
- With the tight channel down from the May high, the odds are that the first reversal up will be minor and lead to sideways trading.
- The bulls have a possible parabolic wedge bottom with the May 15th, May 19th, and May 25th lows. This means the market may get a minor reversal up for a few legs. However, it is essential to remember that parabolic wedge bottoms are typically minor reversals that lead to bear flags (trading range or trend resumption down) than successful bull reversals.
- The bulls need to create more buying pressure before traders are convinced that the market will reverse up.
- The selloff from the May high is a breakout on a higher time frame, which means it will probably have a second leg down after and pullback.
- The market will probably pull back for a few legs and get closer to the moving average over the next few days.
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