For the last two months, EURUSD has been consolidating within a wedge pattern.
I pointed out this structure in the last two weekly forecast videos.
I’ve shorted the pair twice since mid-April, once around 1.0980 on April 15th and again near 1.1000 on May 1st.
I was positioning myself for what I thought would be a breakdown of the monthly trend line that dates back to the 2000 lows.
Unfortunately, that break never came, or at least it hasn’t yet.
I did make some money on both positions, but I was holding the majority for a move below the 1.0770 area.
The EURUSD looked close to breaking that area last week, but the pair had other ideas.
We saw a retest of wedge resistance near 1.0950 on Tuesday, which triggered an influx in selling pressure.
However, Wednesday’s session closed above that 1.0950 area.
The big question now is whether or not this is a bull trap.
For that to materialize, the EURUSD would need to close back inside of the wedge pattern below.
While I don’t have enough evidence to call this a bull trap, I am skeptical that buyers can keep this up.
Only time will tell, but I will be watching for a close back below 1.0940 or thereabouts.
That would expose 1.0890 and 1.0820.
Alternatively, a close above 1.1000 would expose 1.1100.
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