- EUR/USD is stalling at the 2017 low following the strong bull breakout last week.
- While the bears would like to reverse last week’s bull breakout, the odds currently favor a second leg up.
- At the moment, the market is forming overlapping bars that are likely the start of a pullback that will lead to a larger second leg up.
- It is possible that November 15 was the second leg for the bulls and the last day was the pullback dividing the first leg from the second. However, the problem with this argument is that the second leg (November 15) is too small compared to the first. The market likes to have symmetry, which makes me think the market will need a larger second leg up.
- Bears need to develop more selling pressure here and collect bear bars closing on their lows if they are going to reverse last week’s breakout.
- Overall, traders should expect any selling to be brief and for the market to continue sideways to up unless the bear can begin to collect big bear bars closing on their lows. The market has formed a bear channel for over a year and a half. Bear channels typically convert into trading ranges, which increases the odds of sideways to up trading for several months.
EUR/USD Stalls at 2017 Low
