- The market is stalling at the 1.000 big round number and will likely bounce to 1.2000 soon.
- Bears want the opposite and for the market to fall to 0.8000, but the reality is that if the market did fall to that price level, there would be bulls happy to buy the EUR/USD at a deep discount.
- Since the bulls know there are likely value investors below, it gives them the confidence to buy at 1.000 and buy lower. The bulls buying down here will likely buy down to zero, which means they will trade small enough that the risk will not be too big for them. Al will often call these “Hold on for dear life trades.”
- I bring the above up because it limits the downside for the bears long term, and 1.000 is such a vital round number that the market will likely have a hard time getting far below it.
- While the bears may get a big bear breakout bar closing far below the July 14 low, it is not likely and is a low probability outcome.
- Ultimately, the market will likely get above the August high, which is not the major lower high in the broad bear trend. If the bulls get above it, they can argue that the market is in a bull trend or a trading range but no longer in a bear trend.
- Bulls also want a breakout above the August high which is the neckline for a double bottom (July and August low). Next, the bulls wish for a measured move up to the May high.
- Overall, while the odds favor higher prices, the bulls need to develop more buying pressure, or the market may have to go sideways.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or
remove ads
.