EUR/USD: Higher Low More Likely
Al Brooks | Sep 13, 2021 10:03AM ET
As expected, there were EUR/USD sellers above Thursday’s high, after 3 bear days. The bears hope that the reversal down from a double top with the July 30 high will lead to a resumption of the bear trend. EUR/USD has been getting a second leg down for several days after the Sept. 3 parabolic wedge top. There is almost a 60% chance that this 7-day reversal down is minor, but it might reach the Aug. 27 buy climax low before the bulls return.
Bulls want a higher low major trend reversal to form over the next couple weeks. That would also be the right shoulder in a head and shoulders bottom. They then want a breakout above the July 30/Sept. 3 double top and a measured move up. Bears want the July 30/Sept. 3 double top to lead to a break below the Aug. 20 neckline, and then below the Nov. 4, 2020 bottom of the yearlong range.
Since the bull channel to the Sept 3 high was tight, the bears will need a couple of consecutive bear days to convince traders that the bear trend is resuming. EUR/USD has been trading sideways for 3 months with no evidence that this is about to change, with reversals occurring every week or two. So there is only 40% chance of either a strong breakout above the Sept. 3 high or below the Aug. 20 low over the next several weeks.
h2 EUR/USD forex daily chart/h2
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