EUR/USD: Possible Wedge Top
Al Brooks | Jun 28, 2022 10:10AM ET
- The EUR/USD is now in a 10-day pullback since the June 14 low close. The pullback is in a tight channel with several bull bars, which lowers the probability of any short.
- Bears are trying to form a wedge top with June 16th and June 22th (purple line). The bears can still argue that the market is always in short from the June 9th bear breakout, so the bears have a reasonable chance of reaching the June 13th bear close or the June 15th low.
- Bulls hope that any downside breakout below the wedge top (purple line) will be brief and follow a breakout above the June 15 low to the June 27 bear flag.
- Bulls would want a measured move up, taking the market above the June highs.
- The market is in a trading range. Bulls want the June 15 low to be a higher low that leads to an upside breakout.
- Bears see the June 9th selloff as a major lower high, and as long as the bears can continue to make major lower highs that follow lower lows, the bears can argue the market is still in a bear trend.
- Bears also want a test of the 2017 low and hope today sets up a credible wedge top (purple line) that will lead to a selloff and test of the 2017 low.
- The market is in the middle of a tight trading range, so the math is close to neutral. Most traders are probably better off waiting for a breakout and deciding if the breakout will succeed or fail.
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