- The market is in the middle of the March range in the EUR/USD, this is breakout mode which means probabilities are close to 50%-50% regarding a test of the March high, compared to the March Low.
- So far, bears have a 5-bar bear micro channel; this is a sign of strength by the bears.
- Bears have a credible double top with March 10. Go to Al’s encyclopedia of chart patterns and look at all the double top bear flags, and you will notice that it is common for the second leg up in the double top to appear strong, yet, 40% of the time the market reaches the neckline of the double top.
- My point is the bears have at least a 40% chance of testing the neckline here (March 7) and possibly getting the breakout below it.
- Often, double tops have weak follow-through, such as March 22 – 23, which makes it hard to stay short if one sold the double top below March 21.
- Bulls are hopeful that the market will form a double bottom higher low major trend reversal at the March 14 low. Next, the bulls would want a bull breakout of the bear flag (March 17 high).
- Note: I am leaving the measured move projection of the bull breakout above the bear flag (purple line) because I still think this is most likely (not yet 60% probability, though).
- The market broke below a major bear channel back in early March, so the odds are the market will test the top of the bear channel. It is important to remember that the market can reach the top of the bear channel by going sideways for a long enough period of time.
- Lastly, the odds are the 3-month trading range is a final flag, which means the market is likely to test back into the 3-month trading range.
EUR/USD Still In March Trading Range
