- EUR/USD bulls got a strong bull breakout following the FOMC report yesterday, which created a big bull bar on the daily chart.
- Bulls went above the 2020 low and found sellers. These sellers are more likely bulls taking profits than bears selling aggressively.
- Right now, the bears have a possible second entry short below today’s bar (assuming it closes on its low). The problem the bears have is the rally since April 28 has been in a tight trading range that is also a bull micro channel.
- Another problem the bears have is that yesterday May 4, was a surprise bar, so that the odds may favor a second leg up. If the market does get a second leg, it could be 1-2 bars or several).
- Bulls have a reasonable chance at getting a bull breakout of the bear flag (April 28 – May 5) and a measured move up, which would project up to 1.0812 and the high of April 25. This measured move projection would also reach the bottom of the March – April trading range, which is a magnet.
- Bears want a second leg down from the six consecutive bear bars that started on April 21.
- Overall, bulls have done an excellent job of making the market go sideways. However, they need to do more to convince traders that the market is going higher.
EUR/USD: Bulls Going For Upside Breakout
