EUR/USD: Tight Trading Range at 2017 Low
Al Brooks | Nov 18, 2022 10:16AM ET
- EUR/USD bulls see this tight trading range as a pullback after last Thursday and Friday’s breakout, and they are probably right.
- Bears see it as a building up of selling pressure and a possible final flag after any upside breakout.
- So far, the bears have only been able to get one bear bar closing below its midpoint in the past 11 bars, which is a sign of strong buying pressure.
- At the moment, the odds favor a measured move up of last week’s consecutive bull bars and a test of the 1.0800 measured move target above.
- Bears want to prevent the measured move target from getting hit. To prevent this, the bears need to develop more selling pressure in the form of bear bars closing on their lows.
- Yesterday is a High 1 buy signal, but the bar is a bear bar closing above its midpoint. This is not an ideal signal bar for the bulls, which increases the risk that more sellers might be above the bar.
- With the strength of last Thursday and Friday’s bull breakout, some bears may hesitate to fade yesterday’s high and wait to see if more buying or sellers are above the high of November 15. This means that there might be more buyers above yesterday’s high.
- Today is Friday, so the weekly chart is essential. Last week was a strong bull breakout on the weekly chart. The bulls want this week to close above the high of last week (1.0364), and the bears want to prevent this and close under it, which would be a sign of weakness by the bulls.
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