- The market sold off last Friday and today reached a 50% retracement of the strong bull breakout on the EUR/USD ending on February 4.
- While the bears got a bear bar yesterday, the bar had a reasonably big tail.
- Today’s open only went five pips below yesterday’s close, which means traders were eager to buy when yesterday’s bar closed as a weak bear bar near support (50% retracement of the rally).
- Bulls want to create a 2nd entry buy signal bar close on its high today.
- Bull breakout ending on February 4 was strong enough that the odds favor the market will get a second leg above the February highs.
- Bears have two decent bars from the past two trading days, which increases the chances of sellers above.
- Bulls need to get a strong bull bar today to convince traders that last Friday is a 2nd leg trap, trapping bears into a bad short.
- Bulls want a breakout above the January high and a measured move up of the bull breakout that projects to around 1.1740. Next, the bulls would want a measured move of the bull to break out of the double top (January low to January high projecting up). That target projects up to around 1.1840.
- Bears have a credible double top with the January and February highs. While it is not likely the bears get a bear breakout below the neckline (January low), if Europe handles the possible Russian invasion of Ukraine poorly, that could be the catalyst for a successful bear breakout and measured move down.
- Overall, today will be important to see how determined the bulls are to get a second entry to buy closing on its high. This means the bears will try and make today close around its midpoint and possibly far below it.
EUR/USD: Bulls Looking To Create 2nd Entry Buy Signal
