- The EUR/USD is trying to reverse up to the April 13th high close. It was reasonable for the bulls to buy the April 13th close and scale in lower.
- Traders are waiting to see how disappointed the bulls are. If the bulls are eager to exit back at the April 13th close, it will create a resistance level as both bulls and bears begin to sell at that price.
- If the bulls buy more at the April 13th close, it would trap the bears selling at the April 13th close, and the market could breakout above the range.
- More likely, the market is transitioning into a trading range. This means that there are probably sellers above, scaling in higher.
- The bears are beginning to form bear bars closing on their lows, which is good. However, the bears need to start getting closes below the moving average (blue line).
- At the moment, the bulls have more than 20 bars completely above the moving average, which is a sign of strength and a warning that the bulls are probably still in control.
- If the bears can prevent a successful breakout above the April high, it would not take much for traders to decide that the past two months is a trading range. This would likely lead to a test of the midpoint of the past two months.
EUR/USD Likely to Trade in a Range
