- The EUR/USD is forming a small pullback bull trend after the November 10 and 11 upside breakout.
- Bulls are trying their best to reach the measured move target above (1.0699).
- Bears are trying to form a wedge top and, at a minimum, test the moving average (blue line) below.
- Wedge tops are common in small pullback bull trends, and most lead to minor reversals. Traders must be cautious because any pullback will likely lead to sideways price action.
- The target above (purple line) is close enough that the market may be unable to escape the magnetic pull of the target.
- Even if the bears get selloff down to the November 21 low, the bulls will see it as a higher low following the rally that began in November. The November rally is likely one leg up on the higher time frames. This means that the odds favor a second leg after any pullback.
- Lastly, the EUR/USD has been in a bear channel since July 2021. Bear channels typically convert into trading ranges, which means the odds favor higher prices.
EUR/USD: Small Pullback Bull Trend
