- The EUR/USD is getting near the Higher Low Major Trend Reversal (HL MTR on the chart) target on the weekly chart. This target (1.0500) is important because the rally from October 2022 is the first major trendline break of the tight bear channel on the weekly that began in mid-2021.
- In general, higher low or lower high major trend reversals need at least a 30% pullback to make the higher low credible enough for a major trend reversal. The market does not have to stop at 1.0500. This price level is a minimum level bulls will want to see before buying.
- The January 6th low is another important price level that will likely be tested on the daily chart. If the bears can get below it, they can argue that the market is in a bear trend or a trading range. As long as the market is above the January 6th major higher low, traders can argue that the daily chart is still in a bull trend.
- The bears want to continue the tight channel that began after the February 6th bear breakout.
- The odds are that the first reversal up will be minor and lead to sideways trading. This means the bulls need to do something to undo the damage caused by the bears.
- The problem the bears have with the selloff over the past 12 bars is that the limit order bulls are making money below bars. If limit order traders are making money, eventually stop order bulls will begin to make money.
- Since the bears can argue that the market is in a tight bear channel, they want to get a downside breakout and trap the bulls scaling into longs building up a position. The bulls want an upside breakout and a test back to 1.080, which is most likely.
EUR/USD Approaches Trend Reversal Target
