- EUR/USD bulls are trying to get a second leg up after the pullback from the 8-bar micro channel.
- The market is probably always in long, with the two consecutive bull bars closing above the moving average. However, this may be a 20-gap bar test of the moving average, and the market may have a deep pullback before it can go higher.
- Traders know that the market is going to test the April 21 high. However, traders do not know the path the market will take to get there.
- The 8-bar bull micro channel is a sign of strength by the bulls and increases the odds of higher prices. The problem the bulls have is that the channel down from March 31 is tight, increasing the odds of the first reversal being minor.
- This means that the market might have a 50% pullback of the rally up to May 24, so if traders are buying here, they need a stop below May 13.
- Overall, the rally up to May 13 is good for the bulls and a sign that the market is in the early stages of a bull trend or a trading range. The bears still have the argument of a bear trend unless the bulls get above March 31.
- The problem the bears have is that the market has been in a bear trend since early 2021, which is over a year, and the odds favor a bull rally lasting at least a couple of months on the daily chart.
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