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EUR/USD: Breakout Below Trading Range Signals Possible Final Bear Flag

By Al BrooksForexJan 28, 2022 11:12AM ET
www.investing.com/analysis/eurusd-breakout-below-trading-range-signals-possible-final-bear-flag-200616318
EUR/USD: Breakout Below Trading Range Signals Possible Final Bear Flag
By Al Brooks   |  Jan 28, 2022 11:12AM ET
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EUR/USD Daily Chart
EUR/USD Daily Chart

o    The EUR/USD Forex market broke strongly below the 9-week trading range yesterday. It also broke below the June 19, 2020 higher low, which was the start of the 2020 bull channel.

o    The bears want a 200-pip measured move down.

o    They hope the yearlong bear trend will continue down to the 2020 low and then below the bottom of the 7-year trading range.

o    Yesterday was a bear surprise bar. Traders should expect at least a small 2nd leg down after the 1st bounce.

o    Today is the follow-through bar. So far, it is a bull doji, which is weak follow-through.

o    The more it is a big bear bar closing near its low, the more likely the EUR/USD will continue lower.

o    The bulls want a bull day today or Monday, and especially a big bull bar closing near its high. That would be a sign of a possible failed breakout.

o    I have been saying that the bear trend was unlikely to go straight down to 2020 low without at least a couple months of sideways to up trading 1st. While it was likely that the pause would have gone higher, it still met my minimum goal of 2 months of sideways to up trading.

o    That relieved some of the oversold condition, and bears are now more confident about selling again.

o    The monthly chart has been sideways for 7 years. Since trading ranges resist breaking out, it is still more likely that this selloff will reverse up for many months before breaking below the 7-year range.

o    However, the more consecutive bear bars, the higher the odds will be of a successful breakout.

o  The next target for the bears is the bottom of the yearlong bear channel, which is another 100 pips below.

 

EUR/USD: Breakout Below Trading Range Signals Possible Final Bear Flag
 

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EUR/USD: Breakout Below Trading Range Signals Possible Final Bear Flag

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Comments (1)
Aw wright
AndrewJW Jan 28, 2022 10:47PM ET
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In all my years as a QT I've never heard of the ability to forecast based on previous history, ever. Based on your rhetoric of direction, the years 1980, 1985, 1988, 1989, 1990, 1991, 1994, 1995, 2002, 2005, 2008, 2009, 2010, 2011, 2012, 2015, 2017, 2018, 2020 and 2021 you would have been incorrect as the debt on all those years changed the outcome.
 
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