- The EUR/USD closed as a bear bar closing on its low yesterday. This set up a double top at the low of the 3-month trading range (a possible negative gap for the bears).
- Bears are hopeful the double top will lead to a test of the March low or March 14 higher low.
- Bulls want a bull breakout of the bear flag. Today, the bulls need to get a strong bull reversal bar to convince traders of a possible bull breakout of a bear flag.
- Bulls are hopeful that the bull breakout above the March bear flag is strong enough that the bull can get a measured move up of the bear flag (purple lines on chart). That measured move up would also be a test of the February high.
- The odds are still that the 3-month trading range will be a final flag that will lead to sideways to up trading and a likely test of the February high.
- Bulls hope they can get a breakout similar to the 4-bar bull breakout that started in the first week of February.
- Overall, the bears want a double top bear flag, and the bulls want a bull breakout of the double top bear flag. Also, it is essential to remember that even though today looks like it may reverse up, it could look much different when the bar closes. Double tops usually look like they will fail and reverse; however, in general, 40% of double tops are successful.
EUR/USD: Watch Out For Possible Bear Trap
