- The EUR/USD formed a surprise bull breakout at the moving average (blue line) yesterday.
- Yesterday’s breakout is probably strong enough to get a second leg up, so there are probably buyers below any pullback.
- The problem the bulls have is that it is a big bar at resistance, the moving average. This means the bears have a credible argument of a 2nd leg trap with the June 2nd high. Bears will sell the close, trying to prevent follow-through buying today and get a bear reversal bar closing on its low.
- More likely, today will probably disappoint both the bulls and the bears, which means traders will expect a trading range bar to make the market confusing.
- The market may have to test the June 7th high (breakout point), which makes this an important magnet. The bulls want to keep the gap open, which would trap the bears. The bears want to close it, which would allow scale in bears to make money selling during yesterday’s bull breakout to the moving average
EUR/USD: Surprise Breakout at Moving Average
