- The EUR/USD broke above the January 14/February 4 double top yesterday but closed below it and just above the open. It was a big doji bar, and there is now a 5-day tight trading range.
- This is not yet a successful breakout. The bulls need a couple of bull bars closing near their highs and above the double top before traders will look for a measured move up from the 3-month trading range.
- With the lack of buying over the past 6 days, many bulls might want a lower test before they become confident that the yearlong selloff has ended.
- Bears want a reversal down from the double top to below the January low. Additionally, they want a breakout below that low and then a 300-pip measured move down to around the bottom of the 8-year trading range.
- I have been saying that a break below the 3-month trading range was likely to fail and that the reversal up should last at least a couple of months. This is still true.
- However, if Russia invades Ukraine and Europe handles it poorly, the EUR/USD could test the bottom of the 8-year range.
Euro Breaks Above Double Top
