- The EUR/USD gapped up on Sunday’s open and is currently testing Friday’s high. Friday tested the March 7 close, an important magnet, and let the theoretical bears out of the market.
- Right now, the bears have seven consecutive bear bars, which increases the odds that today’s close will be a bull bar. Six straight trend bars are rare, let alone 7, so today should have at least a 1-pip bull close.
- While the bears have demonstrated strength by achieving six consecutive bear bars from the selloff starting on March 31, it still looks like a bear leg in what will continue to be a trading range.
- Bulls hope today will lead to an upside breakout of the double bottom, test the March 31 high, and ultimately lead to a measured move of the March April trading range. This measured move would project above the February 2022 high.
- The odds still favor the bulls and the market reaching the top of the bear channel at a minimum. When there is a failed bear breakout at the bottom of the channel, there is at least a 75% chance the market will test the top of the bear channel.
- Bears hope that the wedge top (March 10, March 17, March 31) will lead to a second leg down following any pullback and ultimately break below the March 7 low and lead to a measured move down — which would reach the 2020 low at a minimum.
- Overall, traders should expect the EUR/USD to go sideways to up at a minimum over the next couple of days. Also, the market is in a trading range, so traders should expect the bears to become disappointed soon. One way to disappoint the bears would be a deep pullback that tests back to the midpoint of the March – April trading range.
EUR/USD: Sideways Action Likely For Next Few Days
