- The EUR/USD is getting a second leg down after the June 2nd bear reversal bar.
- While the selloff over the past three days has been good for the bears, it will probably be limited.
- The reversal up on June 1st was strong enough to have buyers below the bar likely.
- The market has not touched the moving average of 18 bars which is a sign of strength by the bears. However, the market is beginning to develop buying pressure, which increases the odds that the market will need to test the moving average soon.
- The moving average reflects the fair price, and traders are only willing to sell below the fair price (sell cheap) if the market has strong momentum behind it. The bears are losing momentum here, so traders will likely want to sell closer to the fair price (moving average).
- The bulls know that the market will likely need to touch the moving average, so they will begin buying new lows betting on a reversal up.
EUR/USD Bulls Lurk Below March 31 Highs
