EUR/USD Forming Possible Wedge Bottom, Likely To Reverse Up Today Or Tomorrow

2022.05.12 16:36

EUR/USD Daily Chart

• The EUR/USD broke below the 11-bar tight trading range around 12:00 AM PT. The market is forming a possible wedge bottom on the intraday charts and may reverse up today or tomorrow.
• The daily chart 11-bar tight trading range will likely act as a final flag, and the market will reverse back into the March – April range.
• The April 21 selloff was strong enough that there would likely be a small second leg down and it is possible that today is that second leg down.
• Right now, the odds still favor a rally back to the April 21 high.
• Bears want a measuring gap with the April 14 low and the May 5 high.
• It is possible the market had to reach a measuring move based on the March – April trading range, which would project down to 1.0332.
• Overall, traders should look for a possible bull reversal setup today and tomorrow. The bulls will try hard to disappoint the bears on the weekly chart, so the market may reverse up before closing the weekly chart. The first target for the bears would be last week’s low which is 1.0482.

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