EUR/USD: Probable Second Leg Up
Al Brooks | Oct 06, 2022 09:22AM ET
- EUR/USD bulls have a 6-bar bull micro channel that reversed right after the October 4 rally to the 1.000 big round number. This reversal is more likely a pullback than a reversal of the 6-bar micro channel.
- The market is still in a trading range, so the pullback could be deep and test the 50% pullback of the rally (blue line).
- Bears see October 4 as exhaustion and expect the upside breakout to fail and at least go sideways. The bears ultimately want a selloff back down to the low of the year.
- More likely, the market will get above the September 20 and 12 highs.
- Overall, the market may have to pull back for a day or two before the bulls can get their second leg up. It is important to remember that a second leg up could be one bar above the October 4 rally before there is a more complex pullback.
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