- The EUR/USD bears are trying to get a second leg down after the recent strong three-bar bear breakout to below the moving average (blue line).
- While the odds favor a 2nd leg down, today is likely not the start of the 2nd leg down and will probably lead to profit-taking.
- The market will probably have to rally and form a major lower high before the bears can form a major trend reversal and before the bears can get a credible 2nd leg down.
- The rally is strong enough that the market is likely transitioning into a trading range more than a strong bear trend.
- This means traders should expect the bears to be disappointed with the rally. However, the bears will expect a 2nd leg down after the formation of a lower high major trend reversal.
- It is a low probability that the bears will be able to get a strong second leg down without the low-high major trend reversal.
EUR/USD Bears Struggle to Secure a Second Leg Down
