EUR/USD Tight Trading Range In Bear Channel
EUR/USD has seen two climactic legs down below the Aug. 20 low, which means profit taking might commence. The pair have been in a tight trading range for 4 days, which is in a tight bear channel so it's has a small Breakout Mode pattern.
So far today, EUR/USD is having another small inside day—the 3rd consecutive small day. That reduces the chance of a big move up or down today.
Bulls see micro a double bottom and bears see a micro double top (Thursday and Friday’s highs). Since the tight bear channel has been running since the Sept. 3 high, lasting more than 20 bars, and there are magnets below, the first reversal up will likely be minor. The magnets below are the Mar. 9, 2020 high and June 10, 2020 high, which were breakout points in the strong 2020 rally. We've also got a measured move target there, based on the July 30/Sept. 3 double top.
The pair is close enough to its support level for it to reverse up at any time. It is currently likely to dip below the Mar. 9, 2020 high before there is a rally lasting several weeks to move above the Aug. 20 low and maybe to the Sept. 3 high.
Daily Chart
