- The EUR/USD closed under the moving average yesterday for the first time in several bars.
- This is a sign that the market is converting into a trading range and will probably begin to go sideways to down soon.
- Since the market spent so much time above the moving average, there will probably be buyers at the moving average for at least a scalp, which is happening now.
- The bulls want a strong bull close today and a reversal up above the high of May.
- However, the probable the bulls have is that even if today closes as a strong bull bar, it will force traders to buy in the middle of a tight trading range. In general, buying in a tight trading range is a low-probability trade. This means that sideways is more likely.
- Overall, the bears completed the first task of getting a close below the moving average; however, they must do more. The bears need to get consecutive closes below the moving average. Until then, the odds are that the market will continue to go sideways in a tight trading range.
EUR/USD Closes Below Moving Average
