- The EUR/USD formed a High 1 buy setup on March 27th and found buyers above the bar yesterday. A high 1 buy setup after a strong breakout, such as the rally up to March 23rd, typically will lead to a 2nd leg up. This will increase the odds of higher prices.
- This means buyers above March 27th will probably be willing to scale in lower.
- The bears need to develop more selling pressure before they have a reasonable chance at a reversal down.
- The bears did a good job closing the breakout point high (March 15th high and March 24th low). This increases the odds that this rally is a bull leg in what will become a trading range.
- The market may have to get up to the February 1st buy the close bar. It was reasonable to buy it, even though it was a climactic bar and the odds favored a pullback. Also, the market never let the February 1st buy the close bulls out. These reasons above will increase the odds of the market reaching the February 1st close.
- Overall, the market is probably going higher. However, it will likely enter a trading range soon and continue sideways.
EUR/USD Bulls to Get Another Leg Up
