- The market is deciding what will happen with the EUR/USD at March 9 close level. There will be bulls who bought there, and the question is, will they exit back at their original entry at breakeven or continue to buy for a test higher back into the 3-month trading range.
- March 9 was enough of a surprise bar that traders were probably willing to buy the close if they are capable of managing the trade well (wide stop and scale in lower).
- The two consecutive bear bars last week look like a breakout pullback for the bulls rather than a reversal down from the 3-month trading range.
- Bulls had a weak signal bar on March 14, which made the probably low for the reversal up; however, if the bulls can get 2-3 consecutive bull closes, especially with one closing on its high (today), that would increase the odds that the market is going above last week’s high.
- The odds are that the 3-month trading range is a final flag and that the market will get back into the middle of the 3-month trading range.
- Bulls hope that the final flag will be similar to the January 31 reversal, leading to 4 strong bull bars.
- If bulls can get a decisive breakout here with follow-through, especially if the bull bars are big (or many consecutive bull bars) closing above many bars, it will increase the odds of the March 7 being the low for several months.
- Bears want any rally that tests the 3-month trading range low to appear weak and lack bull conviction. This would increase the odds of getting a double top with the March 10 high and a possible breakout below the March 7 low and a test of the 2020 price level.
- More likely, the market will go sideways to up and confuse traders. What I mean is the rally will look too tight for traders to sell but also not quite strong enough to buy (think small pullback bull trend).
EUR/USD: Market Trying To Reach March 9 Bull Close
