- The EURUSD has been in a tight bear channel below the moving average (blue line) since early May.
- The bulls are developing decent buying pressure over the past couple of trading days, which increases the odds that the market will need to reach the moving average.
- The market came close to the moving average on Friday. However, the test came up short, and the market reversed before reaching it.
- The rally on Friday was likely not enough to satisfy a test of the moving average, which increases the probability of buyers not far below.
- The bears see last Friday as a Low 1 short. They want strong follow-through selling today, which would trap and bull buying the Low 1, expecting it to fail.
- More likely, the market will go sideways and reach the moving average over the next few days.
EUR/USD: Test of Moving Average Needed
