- Bulls got a strong close yesterday, which increases the odds that the market is going higher and that the low of the next several months is in.
- Bulls want to get consecutive bull bars and hope today is a very strong bull close that will lead to a rally back into the 3-month trading range.
- The EUR/USD came within five pips of testing at the March 9 close, so as expected, there is some profit-taking back at the March 9 close. March 9 was a reasonable bar to buy, especially if a trader could use a wide stop and scale in lower (which is likely what traders did that are taking profits here).
- Bears want today to close on its low and form a Low 2. The problem the bears have is all the buying pressure, and the past three days have had a bull close. Also, the low of the 3-month trading range is an obvious magnet above, and the market will probably have to test the middle of the 3-month trading range.
- So, if the odds are the market is going to test the middle of the 3-month trading range, why not just buy right now? One can do that. However, they must know how to manage the trade because the market could fall below the March low and reverse up back into the 3-month trading range.
- Also, it is still possible that the market has to test back down to the March 11 low and form a double bottom higher low before going much higher.
- While yesterday is a good bar for the bulls, they need more buying pressure, such as two or three strong bull closes. That would be enough to convince traders that the market is clearly always in long and likely to test the February high.
- Bears want a double top with the March 9 high followed by a test back down to the March low.
- Overall, the odds are the 3-month trading range will be a final flag, and the market will at least test back into the middle of the 3-month trading range.
EUR/USD Remains In Trading Range
