- The EUR/USD is forming a tight bull channel and may be unable to escape the gravitational pull of the November 10 and 11 measured move target above (1.0697).
- While the bears can argue that the current channel up is forming a wedge top, the channel has many bull bars closing on their highs.
- This increases the odds that any wedge top will likely be minor and lead to more sideways trading than down.
- The odds favor a test of the moving average (blue line) soon; traders will hesitate to sell with the measured move target nearby. The reason is that if the odds favor a test of the measured move target above, most traders will instead look to sell after a test of the target.
- Bulls also have a potential negative gap (see chart above) which increases the odds of trapped traders, leading to higher prices.
- Overall, traders should assume the market will try and test the measured move target shortly, even if the market has to test lower first.
EUR/USD: Measured Move Target Above
