EUR/USD: Will It Reverse From Its Bear Bottom?
Al Brooks | Mar 24, 2021 10:31AM ET
EUR/USD is at the bottom of a bear channel that began back in Jan.6; it might reverse up.
The sell off from Mar.11's high has had many reversals—with many bars with tails. It looks more like a bear leg within trading range that began Mar. 9, than a resumption of the bear trend. It's the weak sell off and its being at the bottom of the bear channel that increases the chance that it will reverse up.
Bears will need consecutive bear bars closing below the Mar. 9 point in order to get a test of the Nov. 4 major low at 1.16 on the weekly chart. Bulls need a strong bull signal bar.
- Broke below Mar. 9 low, but immediately entered trading range.
- Trading range is 30-pips tall, so bull day traders are buying reversals up for scalps. They want a strong reversal up, and for today, to close above open, so that today will be a buy signal bar on the daily chart.
- Bears want today to close near the low of day, and far below the Mar. 9 low, to increase the chance of a continuation down to the Nov. 4 major low at 1.16. Bear day traders are selling rallies, but have only been scalping.
- With bears and bulls both scalping, there's an increased chance that today will remain a trading range day; unlikely to become either a big bull or bear trend day.
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