Forex Opinion & Analysis

EUR/USD: Second Leg Down Likely, Buyers Lurk Below

 

EUR/USD
+0.43%

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EUR/USD Daily Chart

  • The market formed a surprise bear reversal bar yesterday. However, it follows a 5-bar bull micro channel.
  • While yesterday’s bar is probably strong enough to have a 2nd leg down, it will likely lead to disappointment for the bears.
  • The market is forming a tight trading range, an expanding triangle. This means the market is deciding on trend reversal up or resumption down.
  • The bulls need a strong reversal bar to undo the bear damage caused yesterday. Next, the bulls need a strong entry bar.
  • Overall, the market is in a tight trading range and beginning to oscillate around the moving average. Until there is a clear breakout, there is no breakout. This means most traders should wait for a clear breakout with follow-through before trading.

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