Today the EUR/USD reached the March 7 close. Bulls hope there will be buyers at this price level (bears buying back shorts, bulls buying to get long), and there likely will be.
Bulls have a problem: there are six consecutive bear bars on the daily chart, so even if the bulls get a strong bull close today, it will probably lead to a minor reversal at best. The bulls will need a micro double bottom before getting a reversal up.
Bears hope that the six consecutive bear bars will be enough to entice bears to stay short and bet on a breakout below March 7.
More likely, the market will go sideways here, and the bulls fight for a double bottom, and the bears fight for a breakout below March 7.
When the market is in a trading range, things are common not to look right. For example, the bears did a great job getting four consecutive bear bars, with three closing on their lows on April 5; however, instead of racing down to the March 7 low, the market hesitated at important support.
Bulls are trying to bottom at important support. However, they have the problem of too many bear bars, which will make traders hesitate and potentially wait to buy a second entry.
Overall, traders should expect a bounce on the daily chart for a day or two. The market has six consecutive bear bars, which means the odds favor a bull close today. The bulls will probably only be able to get a minor reversal and need a second entry to buy to get a credible bottom.
Another thing to note is that the March 30 bull close was a reasonable buy, and it never let those buy-the-close traders out. This means the March 30 close will be a magnet, and the market will likely have to get back to the March 30 close, even if it takes two weeks.
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