The EUR/USD came within a few pips of the measured move target (Purple line at 1.0700) based on the Nov. 10 and 11 bull breakout bars.
Bulls will take profits at this price level, and aggressive bears will sell for a scalp betting on enough profit taking for a profitable scalp.
Traders can argue that yesterday’s rally is the third push-up, forming a wedge top (purple dashed line). This means a reasonable profit target for the bears is the Dec. 13 low (green dashed line) or the Dec. 12 low.
The bulls know that the Dec. 12 low is a logical target for the bears. The bulls might not be willing to buy again until the market has two legs down, testing the Dec. 12 low at a minimum. Dec. 7 may be the bottom of the third leg, meaning the market would need to reach that low before bulls are willing to buy.
Overall, traders should expect the bulls to step aside soon and allow the market to get down a few legs, testing the channel’s bottom and the moving average (blue line).
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