EURUSD is now inside a conflict zone between bulls and bears. That’s because there are two equally compelling setups that traders can look at based on the daily chart.
Bull and Bear point of view for the EURUSD
Bears will probably point out a resistance trendline that started in December 2009 (see long downward equidistant channel and red downward line). The red line is the place that bears will look to sell.
Bulls point out the inverted head and shoulder like chart pattern and its subsequent reversal and support at around 1.2465 (see horizontal blue line). Bulls will look to buy at this blue line.
Between this two views, a region has been defined. While scalpers can trade either way within this zone, swing traders or investors who want to take a longer view may want to wait till market shows hand. If the blue line gives way, the picture becomes bearish. If the red line fails, a bullish picture prevails. The outcome may not be immediately visible if price gets caught and ‘ping-pongs’ in this zone.
