- The EUR/USD has been in a bull channel since November 21 and now has a wedge top with December 5.
- The bears, at a minimum, expect two legs down from the wedge top, and they want a test of the November 30 high.
- The bulls want the market to reach the November 10 and 11 bull breakout measured move target above (purple line). Even though the measured move target seems far away, the market may have to get there due to the strength of the two-bar bull breakout on November 10 and 11.
- Although the bears see a wedge top with the December 5 high, the channel up is tight, and the December 5 sell signal follows three consecutive bull bars, lowering the probability of the bears.
- Even though the December 5 sell signal bar is in a tight channel, bears will still sell below it and scale in higher. This increases the odds that the market will retest the December 5 low even if the market first reaches the bull measured move target above (purple line).
- Overall, traders should expect the market to continue sideways as bulls try for the upside breakout and bears try for the test of the November 30 low.
EUR/USD: Bear Want Second Leg Down
