By Al Brooks
– Since June 18, there have been many overlapping and sideways bars, prominent tails and many reversals. That looks more like a bear leg in what will become a trading range than a bear trend that will continue much lower.
– The EUR/USD Forex market has been in a bear channel since June 25. There is also a double bottom with the July 7 low. But until there are consecutive big bull bars, traders will continue to expect lower prices.
– Targets for the bears are a measured move down from May/June trading range, the March 31 low, and the Nov. 4 bottom of the yearlong trading range.
– Triggered a double bottom buy signal yesterday when it traded above Wednesday’s high.
– However, yesterday then sold off and closed below its midpoint. It is a weak sell signal bar.
– The bears want the selloff to continue to below bottom of the yearlong trading range.
– Although yesterday is a sell signal bar, the EUR/USD has been in a small trading range for 10 days and the signal bar is weak. There is both a double top and a double bottom. This is Breakout Mode.
– Because the trading range is in a bear trend, the bears have a slightly greater chance of a breakout below.