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EUR/USD: Breakout Mode, Testing Moving Average

Published 07/29/2022, 09:31 AM
Updated 07/09/2023, 06:31 AM

EUR/USD Daily Chart

  • Yesterday had a big tail below and closed at its open. The bears who sold the close on July 26 were disappointed and bought back shorts at the July 26 close.
  • The EUR/USD is in a tight trading range at the moving average, which means the market is in breakout mode. This means the probability is getting close to 50% for both the bulls and bears.
  • As I have been saying, the two targets are the 2017 low and the 1.0000 considerable round number. Often where there are two obvious targets, the market will probe in the middle of the two targets.
  • Ultimately, the odds favor a test of the 2017 low and bottom of the two-month trading range (May – June).
  • Even if the market reaches the 1.0000 big round number, traders will be confident that it will have to return to the 2017 low.
  • Some traders would like the market to retest the 1.0000 big round number and form a double bottom. Next, those traders would like a breakout above the neckline (July 21) and a measured move up to the June 27 high.
  • Today is Friday, so weekly support and resistance are important.
  • The market is only 20 pips below the open of the week (1.0213). The open of the week is close enough that it is an obvious magnet that may get tested today.

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