- EUR/USD bear achieved the goal of a second leg down after the January 3rd bear breakout.
- There are probably buyers not far below the January 3rd low, and the market will begin to go sideways.
- The market has been in a bull channel since November 21st and bull channels typically evolve into trading ranges and not bear trends, which means sideways is most likely.
- Also, the bears were unable to get immediate follow-through selling after January 3rd. This will increase the odds of more sideways here.
- Lastly, it was reasonable to buy the moving average during the January 3rd selloff. Those bulls who bought the moving average with limit orders are likely willing to scale in lower, increasing the probability of more sideways trading.
- Overall, the market will probably go lower and get closer to the November 30th or November 21st low (bottom of the channel); however, the market may have to go sideways for some time first.
EUR/USD: Second Leg Down, Sideways Action Likely
