- The EUR/USD found profit-taking back at the 2-month trading range low (April 14).
- Bulls managed to get a close above the trading range low, which is a sign of strength by the bulls.
- The reversal up is strong enough that any reversal down will likely be minor.
- Bears hope that they can form a lower high with April 21 and get a successful reversal back down.
- The market will likely reach the April 21 high after any pullback.
- Although the past two weeks have had a strong rally (see weekly chart for better visual), this is a trendline break of a bear channel, which means the market may get a deeper pullback than what the bulls want, creating a higher low major trend reversal.
- It is important to note that the market had weak follow-through after every strong bull breakout bar, which is a sign that the market may have a deep pullback.
- Overall, bears will try to get a strong bear close today and follow through the next trading day. This would increase the odds of lower prices. The bulls want the opposite and for any pullback to be bought and prevent the bears from creating strong bear closes.
- Lastly, the bears want the May 23 -24 bear breakout to lead to a 2nd leg bear trap and a test of the May 23 low.
EUR/USD: Bulls Close Above 2-Month Trading Range Low
