EUR/USD: Odds Still Favor Bull Breakout

2022.04.04 16:52

   EUR/USD Daily Chart

• The EUR/USD formed a wedge top on March 31, which was a bear bar closing on its low.
• The entry bar on April 1 was a bear bar. Although it was a small bear bar, it is still a bear bar which is good for the bears.
• So far, today has broken below April 1’s low. The bears want the market to reach the March 28 low, the bottom of the most recent bull leg.
• Bulls want this selloff to be another higher low in the bull channel.
• Traders need to be open to the market having to test down to the March 28 low or the March 14 low and form a double bottom higher low major trend reversal.
• While the market may reach the March low, the odds are that any test of the March low will find buyers.
• The odds still favor an upside bull breakout. The problem is that traders do not know the path of the bull breakout. Will the market reverse up within a few days and get the upside breakout, or will the market have to test lower such as one of the March higher lows or even the March low.

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