- EUR/USD bears got a bear breakout bar yesterday. However, the bar is small and needs follow-through.
- Yesterday is a problem for the bulls, as it is the fifth bar in a bear micro channel, which increases the odds that the first reversal up will fail and lead to a second leg down.
- Bulls will try their best to prevent follow-through selling today, which would increase the odds of going sideways to up.
- At the moment, the odds favor the bulls getting a second leg up. However, traders need to be suspicious of the bulls here. If the bulls were clearly in control, they would not allow the bear trend bar to close on its low and below the past five bars.
- Traders should expect at least a small second leg sideways to expect down today to be disappointing for both the bulls and the bears.
- Bears hope this is the start of an endless pullback and reversal that will fall below the November 10 breakout.
- Bulls see this selloff over the past few days as a 50% pullback test of the November 10th low to the November 15 high.
- Overall, traders will pay close attention to today’s close to see if the bears can get a second consecutive strong bear trend bar close.
EUR/USD: Bear Breakout, But Odds Favor Rebound
