- The EUR/USD has been in a tight bear channel for the past month.
- The market is getting close to support, which increases the odds of a bounce and a couple of legs sideways to up.
- Bears got trapped selling around the March 17th high, and the market is currently testing that same price level.
- Traders will wonder if the market will rally from this same price level as it did around March 17th. The bears who sold at this price level were disappointed with the follow-through and were likely forced to buy back shorts. The bears will be cautious about selling at the same price level (March 17th).
- The bulls hope that the market is forming a parabolic wedge bottom. However, most parabolic wedges are minor reversals. This means that the best the bulls can hope for is sideways to up. It’s possible that the market will get a strong reversal up. However, it is not likely.
- The bulls need a decent trendline break of the tight bear channel and a retest of the May low. That would create a more credible bottom. This means that the odds favor sideways for the next couple of weeks.
EUR/USD: Bounce Likely
