EUR/USD To Bounce Before Heading Lower
EUR/USD Daily Chart
- The EUR/USD bears have been able to get three bars completely below the moving average (blue line), which is a sign of strength.
- While the recent selloff is strong enough to increase the odds of a second leg down, the pullback may be more profound than what the bears want.
- Most traders will want to see a credible lower-high major trend reversal before being too eager to sell.
- While the selling pressure over the past week has been strong, it is now below the moving average, which is likely support.
- The past three days are the first time the market has been completely below the moving average since October 2022. This is a sign of strong buying pressure.
- This means that the bulls have been so eager to buy that they have been willing to continuously pay above the average price (moving average) for several months.
- The bulls will likely be happy to buy at this price level, especially if they can form a micro double bottom.
- Overall, traders should expect a bounce and sideways up over the next few days.