EUR/USD: Bears Looking For Breakout Below Bull Flag

2022.06.07 16:46

EUR/USD Daily Chart

• EUR/USD bear are trying to get three consecutive bear bars and a bear breakout below a bull flag.
• Bears hope that they can reach the May 23 low and 50% pullback of the May 30 rally. The bears will ultimately try and test the May 13 low. Also, the bears are trying to close the May 6 breakout point gap.
• Bulls will see any selloff as a higher low major trend reversal that will lead to a second leg up from the May 31 rally and test the April 21 high.
• Right now, the odds favor a higher low and the bears failing to fall below the May 13 high.
• The market is in a trading range, so the selloff could be deeper than what traders want.
• Bears will try hard to get a big bear breakout with follow through or 3-5 consecutive bear bars, which would increase the odds of lower prices. The bulls know this and will try to prevent strong consecutive bear bars.
• Right now, it looks like the odds favor a pullback and test of the May 23 low (red box) and a test of the 50% pullback level (blue line) before the market can go much higher.

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