- The bulls finally got a bar to go above the high of the previous day on the daily chart.
- The EUR/USD will likely test the 2020 low (1.0636). Scale in bulls likely bought here and were willing to scale in lower, confident the market would get back to the 2020 low.
- The market has six consecutive bear bars, so the first reversal up will probably be minor and lead to sideways. The bulls will likely need to form a double bottom below they can expect a reversal up.
- The current April 22 – April 28 selloff is the best-looking selloff since April 2021. This increases the odds of this selloff being exhaustion late in a move and that the market will ultimately reverse up, testing the April 22 high.
- The April 22 selloff is also a possibly failed breakout of an even broader channel. This means the odds ultimately favor a test of the top of the bear trendline above (red line).
- Today is Friday, so weekly support and resistance are important to look at.
- This week is the biggest bear bar since 2021 which means likely exhaustion. The bears want this week to close with as little a tail as possible and below the 2020 low to demonstrate strength.
- Most likely, this week will have a disappointing close for the bears.
- Bulls know a bull close this week is not likely, which means they will try for a close above the 2020 low or above this week’s midpoint, which corresponds to the 2020 low price level.
- Overall, traders should pay close attention to the 2020 low and expect that price level (1.0636) to act as a magnet for most of the day.
EUR/USD: Minor Upward Reversal Will Likely Test 2020 Low
