EUR/USD Daily Chart.
– Yesterday was a big bear day for EUR/USD, closing in its bottom third, but just 3 pips below the Sept. 13 bull flag attempt.
– This is disappointing for the bears.
– Bears want a bear day today, which would confirm the breakout below Monday’s bull flag. If today is a bear bar closing near its low, the selloff will probably continue down to the August low.
– The bulls are hoping that yesterday was a bear trap. They want it to be a brief stop-run below support. They need a bull bar today to bolster their argument. The conspicuous tail at yesterday’s low increases the chance of a failure.
– Today currently is a small bull day. If today is a bull day closing near it high, it will be a buy signal bar for a failed bear breakout.
– Also, a reversal up would be from a micro wedge with the September 8 and 13 lows.
So far, the selloff looks more like a leg in a trading range or a pullback from the Sept.13 rally than a resumption of the May bear trend.
– A strong reversal up from here would be from a head and shoulders bottom where the July 21 low is the left shoulder.
– If today is either a small bull or small bear bar, traders will expect at least one or two more sideways days as they decide whether yesterday’s breakout will succeed or fail.
EUR/USD: A Higher Low More Likely
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