- The EUR/USD reached the April 13th close early this morning, after yesterday closed as a bull bar closed on its high.
- The bears tried to create a 2nd leg trap following the three-bar breakout up to April 13th. However, most 2nd leg traps lead to trading ranges and not reversals.
- The channel up from the March low is tight. This increased the odds of the buy-the-close bulls who bought the April 13th close and lower making money.
- Yesterday’s bull breakout is probably strong enough to have a 2nd leg up. However, the risk the bulls face is that the market is in a trading range. The bears might overwhelm the bulls and reverse yesterday’s strong bull close.
- Overall, traders should assume that the market is probably transitioning into a trading range. This means that bulls will probably become disappointed soon, and the market will likely go sideways.
EUR/USD: Profit Taking Ensues at April 13 Close
