- The EUR/USD formed a strong bull breakout with follow-through yesterday, closing far above the May high.
- While the rally that began on May 6th is climactic, it is strong enough that the first reversal up will probably fail.
- The risk is getting large for the bulls. This means that bulls will take partial profits on longs and increase the odds of the market getting pullback.
- The downside is probably limited, and the best the bears can probably get is one to two legs sideways.
- The bears hope to get a strong downside breakout that disappoints the bulls. The bulls will likely buy the first reversal down, and the market will get a second leg up.
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