- Yesterday was a bull bar closing near its high and a high 1 buy signal bar. Today so far is doji day and another trading range day.
- Bulls correctly believe that the 3-day selloff is more likely a pullback from breakout above January 14 high than a reversal down from a double top (January 14 and February 10).
- However, the past 8 days are creating trading range price action. The pullback might have to go more sideways to down before the bulls will buy.
- Traders want to seek a series of strong trend bars in either direction before looking for a trend. In the meantime, they are betting on reversals and taking quick profits.
- I believe Putin will not invade because he will conclude that the price is too high.
- He still wants the Ukraine (he calls it “my Ukraine”), but he will probably use every non-military tool at his disposal. For example, he will try to manipulate Ukrainian politics to make it more friendly to Russia. That takes pressure off of the EUR/USD.
- This is consistent with the daily, weekly, and monthly EUR/USD charts. There should be a rally lasting at least a couple months and reaching the October high.
- Buyers are waiting until they are certain that Putin will not invade and that the problem will not spread further west in Europe.
EUR/USD: Rally To October High Likely
