- The EUR/USD pair has three consecutive bear bars in a row, and yesterday closed below the day's open.
- The argument of a small pullback bull trend is likely over for the bulls. This means the market is either in a bear trend or a trading range.
- I have been saying for some time that the EUR/USD needs to pull back and test the Jan. 6 area. This is because the October 2022 rally is the first major trendline break of the bear trend on the weekly chart that began back in mid-2021.
- While the rally since October 2022 is strong, it only has a 30% chance of leading to an endless pullback without forming a pullback and a higher low major trend reversal. This means traders should expect a test of the 1.0500 price level before bulls will be eager to buy.
- Traders should assume the recent three-bar bear breakout will be strong enough for a second leg down, which means the first reversal up will be minor.
EUR/USD's Bear Breakout Continues
