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EUR/USD: Bulls Want Major Trend Reversal

By Al BrooksForexAug 16, 2022 09:29AM ET
EUR/USD: Bulls Want Major Trend Reversal
By Al Brooks   |  Aug 16, 2022 09:29AM ET
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EUR/USD Daily Chart
EUR/USD Daily Chart

  • EUR/USD bulls reached 2017 low and failed to break out above the August 2 high.
  • Bears have gotten two consecutive bear bars and are testing the July 27 lows.
  • While the August 10 breakout was good for the bulls, they needed a better bottom for bulls to buy for a swing.
  • The market had about 20 bars from the July 14 low to the August 10 high, which increases the odds that any reversal down to the July 27 low or the July 14 low will lead to a Major trend reversal.
  • Often, the market will try and form a major trend reversal, such as the July 27 higher low major trend reversal, and it will not have enough bars to make it credible and increases the odds of a minor reversal. Minor reversals typically lead to lets in trading ranges and not the start of new trends.
  • Now, bulls have enough bars to form a major trend reversal. However, the problem they have is the past two days are strong bear trend bars. This increases the odds of a small second leg down and sideways.
  • Bulls would need a good signal bar here, ideally closer to the July 27 low, but the first reversal up may fail, so the market will likely go sideways over the next couple of days.
  • The bears had a good trend bar yesterday. However, the market is in a trading range, so the follow-through today will likely disappoint the bears.
  • Bears hope that the current selloff will break far below the neckline (July 14 or July 27), and the market will have a measured move down from the double top (July 20 or August 2).
EUR/USD: Bulls Want Major Trend Reversal

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EUR/USD: Bulls Want Major Trend Reversal

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