- The EUR/USD will likely bounce for a few days as the bears begin to take partial profits.
- The market likely formed an exhaustive sell climax that started on April 21.
- Bears hope the selloff from April 21 will lead to a measuring gap; however, more likely, it will lead to profit-making and a rally back into the March—April trading range.
- Bulls will likely need at least a micro double bottom before they can get a credible reversal back into the 2-month trading range.
- Bears are close to the 2017 low (1.0339), and the market may have to reach it before it reverses back into the 2-month trading range.
- The market was only 130 pips away from the low of 2017. If it reverses up now without getting closer to the 2017 low, traders will question if this was an acceptable test. This means that if the market attempts to reverse up from here, it may not be able to escape the gravitational pull of the 2017 low and will have to reach it before it goes much higher.
- One thing to point out is that the market is in a trading range on the monthly chart. When the market is in a trading range, it will often go below one support level but not the next support level. The market went below the 2020 low and may not go below the 2017 low.
- The market will like to have to test the 2020 low soon. This is due to the scale in bulls who bought the 2020 and scaled in lower.
- Overall, traders should expect a minor reversal up soon as bears begin to take partial profits. Also, as I said above, the market will likely test the 2020 low here in the next day or two.
EUR/USD: Bears Likely To Take Partial Profits
