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

EUR/USD
+0.53%

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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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