- The EUR/USD formed a bull reversal bar yesterday. However, it is small and follows large bear trend bars.
- The odds are there are sellers above yesterday’s high and that the market will go sideways to down.
- The bulls want the recent selloff over the past few days to lead to a higher low and form a 2nd leg bear trap. Next, the bulls want to trap the bears and get an upside breakout, testing the high of May 11th.
- The problem with the 2nd leg bear trap argument is that the channel down over the past week and a half is tight. This means that the first reversal up will likely be limited.
- This means traders should expect lower prices unless the bulls can develop more buying pressure. The bears still want to get to the March 24th bottom of the bear channel.
EUR/USD Bears Likely to Get Another Leg Down
