- At the moment, the EUR/USD has two consecutive bull bars on the daily chart following an 11-bar bear micro channel.
- The odds still favor a minor reversal up and a second leg down.
- Bulls need to do more to convince traders that they have taken control.
- It is important to mention that the second leg down maybe a retest of Monday’s bear close. This means the second leg down does not have to go down far to form a double bottom and give the bulls a reason to buy for a swing.
- The market is reversing back into the bear channel after the bear breakout below.
- Is today strong enough to reverse the recent three consecutive bear bars? Assuming today will close on its high, it will damage the bear case; however, the bulls will likely need more before traders are willing to buy aggressively.
- The channel down from February 10 was tight. It had several buy climaxes, which are partially why the market is bouncing here.
- Since the market went sideways for 3 months, there will be many bulls who bought the bear breakout of the 3-month trading range, confident they could make a profit or avoid a loss if they used a wide stop and scaled in. This means some of those scale-in bulls will use any bounce to exit the trade breakeven.
- Some bears sold the close of Monday, and they may be willing to scale in. Those bears may be disappointed here and look to buy back shorts on any pullback.
- Overall, the EUR/USD will probably go sideways over the next several days.
- If bulls get a strong bull close today and another bull close tomorrow, the odds will increase for them, and the bears may give up.
EUR/USD: Bulls Get Strong Upward Reversal
