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EUR/USD: Odds Favor Sideways To Up

ByAl Brooks
Published 10/10/2022, 09:44 AM
Updated 07/09/2023, 06:31 AM

EUR/USD Daily Chart

  • EUR/USD bear have done a great job disappointing the bulls creating a big up, big down situation. The odds favor sideways when you have a big move up followed by a big move down.
  • Bulls see this current selloff as a pullback from the October 4 rally.
  • Bears see the October 4 rally as a pullback from the bear breakout that started in late September. They also see the current selloff as the start of a trend resumption down.
  • The problem the bears face is that the market is in a broad bear channel with decent buying pressure developing. Channels evolve 75% of the time into trading ranges, which means the odds favor sideways to up soon since this bear channel has lasted so long.
  • The selloff over the past four days is strong enough that the bulls will need some double bottom before they can get some second leg up from the October 4 rally.
  • Bears want to continue to create an endless pullback and break below the September lows.

Latest comments

Have you looked at the devastation of the EU economy? They are undergoing forced deindustrialization. Both from a TA and fundamental view the odds favor more downside. Perhaps a LOT of downside.
No the odds don't favor the bull case. Learn how to read a chart. This one is awful on every single time scale.
I'm not going to rely purely on technicals at the expense of fundamentals especially when we have a 50yr catastrophic event. what is the biggest driver of currencies? I believe it's GDP, especially where GDP is headed over the next 6mo. Whose GDP is expected to grow over the next 6mo? European? USA? The largest steel mill in Germany closed down 2 plants because it can't compete because of high fuel costs. In addition there is the threat of war. These are serious headwinds that are unprecedented. The US is doesn't have energy supply risks but prices are higher here than normal there isn't any threat to shortages. These fundamentals have had a impact on this pair as sell offs fall further and rallies fade faster. This is why AL hasn't been on the right side of this sell off.
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