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EUR/USD: Breakout Likely

By Al BrooksForexAug 08, 2022 10:02AM ET
EUR/USD: Breakout Likely
By Al Brooks   |  Aug 08, 2022 10:02AM ET
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EUR/USD Daily Chart
EUR/USD Daily Chart

  • The EUR/USD has continued to go sideways in a tight trading range which is now a triangle.
  • There will likely be a breakout soon, but the direction is unclear. The bulls are getting strong bull bars closing on their highs. However, there have only been two closes above the moving average in over 20 bars which is a sign of strength by the bears.
  • The range is tight, so most traders should wait to see the breakout and follow-through before deciding on a direction.
  • The market is between two important magnets, the 2017 low and the 1.0000 big round number. This also indicates that the market is neutral and deciding which target to test.
  • It would be better for the bulls if the market tested down first to the 1.0000 big round number before testing the 2017 low. That would create a double bottom with the July 14 low, and give the bulls a better opportunity to break above the August 2nd neckline of the double bottom (July 14), and get a measured move up testing the June 24 high.
  • Ultimately, the market will probably get back to the middle of the May to June trading range, since the bear breakout below in July was a likely final flag setup.
  • Currently, traders should patiently wait for the breakout. While it is possible this tight trading range can go sideways for another 12 bars, it is unlikely.
EUR/USD: Breakout Likely

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EUR/USD: Breakout Likely

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