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EURUSD: Respect the Bull Trap Potential

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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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14 comments
Justin Bennett says

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Axole Maranjana says

Thanks for the fully detailed analysis.

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    Justin Bennett says

    You’re welcome.

    Reply
Gift Ameh says

Thank you for your analysis. I see a bullish setup on this pair. This correlates with a buy setup on GBPUSD while EURGBP goes down instead

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    Justin Bennett says

    Maybe it is as long as 1.0940 holds as support. I’m not convinced.

    Reply
Isiyaku Ibrahim says

Great Justin

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ovosi ayodele says

Good day Justin.Your anallytical skills are great.The EURUSD swing of 1.0338 to 1.2551 (2016 to 2018) was retraced to around 74.6% level.The pair is now heading towards the 61.8% level (1.1184).That seems the nearest resistance.If there are no strong fundamental news to move it higher,EURUSD might just reverse from 1.1184 down to 1.0338 and even lower.Only time will tell.For me Iam keeping an eye on 1.1184 level

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Ngo Sy Ha says

thanks you

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Soretire says

Such an amazing analysis

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ali says

Thanks for the update sir justin.

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Dr.Zahoor says

Hello!I follow your informative weekly forex forecast..Dr.Zahoor.

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Malika Lewis says

Can you explain why you thought it was a bull trap?

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David Mascowe says

Great teacher..

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Venkiteswaran Venky says

Hi Justin, it is really worth reading your blog as well as your weekly video analysis. I go through only a few analyst’s views in that you are one of my favourite. Wish you good luck. I am a successful trader with my own S & R set-ups, yet I do read your presentation. Thanks for updating every week without any hesitation. I strongly recommend your videos to all traders. Short and simple!

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