EUR/USD Daily Chart
- The EUR/USD had a surprise bear breakout following a wedge (7-bar Micro Wedge) top. Yesterday’s bear breakout is enough of a surprise that it will probably get a second leg down.
- This means there are probably sellers above today’s bar, and the market will have to form a micro double bottom before the bulls can get a reversal up.
- The bulls need to get a strong reversal today to undo the damage caused by the bears. There will be bears looking to sell a pullback of yesterday’s close. If today is a strong bull trend bar, it will trap those bears, forcing them to exit with a loss.
- Even if today is a decent size bull bar like Feb. 27, it will still be problematic since the bulls will probably need a micro double bottom before traders buy.
- The lower probability even would be a consecutive strong bear trend bar today. This would increase the probability of getting down to the Nov. 21 bear channel low.
- Overall, traders should expect the bears to be disappointed with the follow-through after yesterday’s big bear trend bar. This means that sideways is likely over the next week.