EUR/USD bears completely reversed the May 4 rally that reached the 2020 low.
While the bears did an excellent job reversing the market, the past 6 bars are still in a tight trading range, which increases the odds of more sideways trading.
Bulls hope yesterday’s bear trend bar is just a breakout pullback of the May 4 rally and that the market will still get the upside breakout of the neckline of the double bottom.
One can also say that an upside breakout of yesterday’s high would be a bull breakout of a bear flag and lead to a possible measured move which would project up to 1.0817. This would create a possible final flag reversal on the daily chart.
Bears hope that the 6-bar selloff that started on April 21 will lead to a couple of legs down and reach the 2017 low of 1.0339.
Overall, the odds favor the market reaching the March – April trading range and the April 25 high. April 25 is a likely exhaustive breakout.
Traders should expect continued trading range price action and a possible rally over the next few trading days.
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