- The EUR/USD broke above the May 5 top of the ten-day final flag this morning.
- Bulls want this to be an early stage of a strong rally that tests back into the March – April trading range.
- Bulls also want the market to test the April 21 high, which is the top of a sell climax.
- The market broke above a double top (May 5 and May 19, so the market may get a measured move projection to 1.0865, which would drive the market up to the bottom of the March – April trading range.
- Bears hope the breakout above the May 5 high leads to a failed breakout of a lower high in a broad bear channel that continues down.
- Bears may see the April 21 high as a major lower high, and as long as the market stays below it, the bears will conclude that market is still in a bear trend.
- More likely, the market is forming a bottom and will ultimately rally higher.
- The market is also back at the 2020 low (green line on chart).
- Today, bulls have broken out above the 20-period moving average and the May 5 high and want today to close on its high and tomorrow to be a follow-through bar that would convince traders that the market is breaking out to the upside.
- Bears want the opposite and hope that today or tomorrow is a big bear bar closing on its low similar to May 18. Even if the bears get a big bear close, the bulls still have a 6-bar bull micro channel which increases the odds of a second leg up after any pullback.
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