- EUR/USD is in a bull channel, and the bulls are trying their best to reach the measured move target above (1.0700).
- The pair has been forming a triangle over the past two trading days. This increases the odds that an upside breakout will lead to a final flag.
- The bulls want the slight pullback bull trend to continue and the negative gap (blue line) to lead to a measured move up. The small pullback bull trend will likely lead to a trading range, and the market will have to test down for a couple of legs.
- Price has been away from the moving average for 22 bars which is a sign of bull strength. However, it is climactic, which means the odds are that the market will have to test the moving average soon.
- The weekly chart has been in a tight bear channel since July 2021. While the rally from the October low is strong, it will likely need a pullback and form a higher low to satisfy a retest of the lows.
- As strong as the rally has been over the past two months, it is likely minor, and traders will expect a pullback to form a higher low.
- Traders will likely want to see the pullback go below 1.0200 at a minimum to satisfy that the pullback is a possible higher low major trend reversal.
- Overall, the market will probably convert into a trading range soon, regardless of if the market has to reach the 1.0700 measured move target first.
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