- EUR/USD bears now have four consecutive bear bars closing on low, with 3 bars being big. This is a sign of urgency by the bears.
- The odds are the first reversal up will fail and lead to a second leg down.
- As of this moment, the market will probably reach the March 7 Low close and get the March 7 low.
- Bulls will need to develop more buying pressure before getting a credible swing up. At a minimum, the bulls will need a micro double bottom.
- The market is currently sell the close, which means bears will sell closings betting that the first reversal up will fail.
- The market is still within the March trading range and is near the buy zone. While the four consecutive bear bars are too strong for most bulls to buy if the market starts to go sideways, more and more traders will buy (to go long and to exit shorts).
- Bears are hopeful that this selloff leads to a bear breakout of the March range and a test down to the 2020 price levels.
- Bears have a strong case here for getting the bear breakout. However, the market is still in a trading range and may form a bottom which would disappoint traders.
- It will be interesting to see what the March 7 sell the close bears will do here. In theory, some bears sold the March 7 close and were willing to scale in higher. Some bears would add on more below the March 10 bear bar and exit the entire trader at breakeven.
- Other bears may sell more below March 31, and after the four consecutive bear bars, those bears might be willing to press their bets and continue to sell more at the March 7 close. Otherwise, those bears will look to buy back shorts at the March 7 close, which would cause the market to bounce.
- Currently, there are some bulls and bears buying since the market is close to the March 7 close. There is potential for today to close on its high, but the bulls’ problem is that a bull bar will be following four consecutive bear bars.
- Bulls hope that a strong bull close today will lead to a double bottom and measured move up. The bears hope any rally today will be followed by more selling and a weak bull signal bar.
EUR/USD Testing March 7 Sell Bar
