EUR/USD
+0.02%
- The EUR/USD formed a bull reversal bar yesterday. However, it is small and follows large bear trend bars.
- The odds are there are sellers above yesterday’s high and that the market will go sideways to down.
- The bulls want the recent selloff over the past few days to lead to a higher low and form a 2nd leg bear trap. Next, the bulls want to trap the bears and get an upside breakout, testing the high of May 11th.
- The problem with the 2nd leg bear trap argument is that the channel down over the past week and a half is tight. This means that the first reversal up will likely be limited.
- This means traders should expect lower prices unless the bulls can develop more buying pressure. The bears still want to get to the March 24th bottom of the bear channel.
