Yesterday had EUR/USD in a Low 1 sell signal bar in a bear trend that began in May. Today triggered the sell signal by trading below yesterday’s low. However, Friday was a Bull Surprise Bar after a reversal up from a double bottom with the March low. That makes it more likely that there will be more buyers than sellers below yesterday’s low. The odds favor at least a small second leg sideways to up.
The bulls hope that EUR/USD will trade up for several weeks to above the July 30 high, while bears hope Friday was just a Bull Trap in a bear channel. They are hoping that today’s selloff will continue tomorrow, which would make a test of the August low likely.
At the moment, the chart has both a bear flag and a reversal up from a double bottom. Today and tomorrow will tell us which of the 2 outcomes will succeed.
The more bearish the bars are, the more likely the bear trend is resuming. The more bullish they are, the more likely the bulls will make another attempt to break above the EMA and continue up to the July 30 high.
EUR/USD daily chart
