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EUR/USD Likely to Test Moving Average Soon

Published 01/30/2023, 09:24 AM

EUR/USD Daily Chart

  •  The EUR/USD has been in a bull channel for over two months. The channel up is tight, which will limit the first reversal down.
  • The market has been away from the moving average for some time. This will increase the odds of a pullback to the moving average soon.
  • While the channel up may continue, the market will likely transition into a trading range soon and not continue much higher.
  • The weekly chart has been in a tight bear channel since mid-2021, and the rally from October 2022 was the first trendline break of the bear channel.
  • Bulls will likely need a higher low major trend reversal on the weekly chart, which means the market will probably need to pull back to around the 1.05 price level before bulls view it as a credible higher low major trend reversal.
  • Overall, this means that the daily chart will likely be sideways for several months.

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