EUR/USD: Profit Taking at Measured Move Target

EUR/USD: Profit Taking at Measured Move Target

 
EUR/USD
+0.19%

  • The EUR/USD came within a few pips of the measured move target (Purple line at 1.0700) based on the Nov. 10 and 11 bull breakout bars.
  • Bulls will take profits at this price level, and aggressive bears will sell for a scalp betting on enough profit taking for a profitable scalp.
  • Traders can argue that yesterday’s rally is the third push-up, forming a wedge top (purple dashed line). This means a reasonable profit target for the bears is the Dec. 13 low (green dashed line) or the Dec. 12 low.
  • The bulls know that the Dec. 12 low is a logical target for the bears. The bulls might not be willing to buy again until the market has two legs down, testing the Dec. 12 low at a minimum. Dec. 7 may be the bottom of the third leg, meaning the market would need to reach that low before bulls are willing to buy.
  • Overall, traders should expect the bulls to step aside soon and allow the market to get down a few legs, testing the channel’s bottom and the moving average (blue line).


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