EUR/USD Forex Daily: Wedge Bear Channel In Play
Al Brooks | Jul 26, 2021 09:58AM ET
Today EUR/USD rose above Friday’s high, which triggered a buy signal for consecutive wedges, and for a higher low micro double bottom with the July 21 low. It is important that today’s low stayed above the July 21 low, which is the current bottom of the wedge. Sometimes a trend begins with a minor low that is easy to overlook. However, Friday was a small bull Doji bar, which is a weak buy signal bar.
So far, today is another small bull bar, and it is therefore a weak entry bar. The wedge bear channel since June 25 has been tight. It is therefore equally likely that there will be a reversal up or a breakout below the March low.
EUR/USD has been in a five sideways days trend, so the pair might continue in a tight trading range up to Wednesday’s FOMC announcement. It is a potential catalyst for a reversal up from the wedge bottom or for a break below the March and November lows. Until we have a strong reversal up, the odds favor at least slightly lower prices.
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