EUR/USD Daily: Testing The July Wedge Bottom
Friday was big bear day for EUR/USD, in reversal down from the July 6/July 30 double top bear flag. Bears want a breakout below the July 21 low, which is the neckline of a double top. They want a 150-pip measured move down, which would be just above the November low at the bottom of the year long trading range.
Bears then want a break below the year long trading range and then a measured move down to last year’s low at around 1.06. Since trading ranges resist breaking out, there’ll probably will be buyers around the November low.
Bulls, though, want a reversal up from the lower low double bottom with the July low. They need a big bull bar this week to attract buyers. A micro double bottom will probably be needed since Friday saw a big Bear Surprise Bar form. Since we’re now at the July low, where EUR/USD went sideways for 6 days, there’s an increased chance of a trading range forming for a few days.
Traders are deciding if Friday was the start of a new leg down or just a sell vacuum test of the July low. They need more information, which means more bars. If there is another big bear bar over the next few days, the selloff should continue to 1.16. But, if we see a big bull bar this week, then the July trading range will continue, or the reversal up will begin a move up to the June 25 major lower high.
EUR/USD Testing Wedge Bottom