EUR/USD: Second Leg Lower Likely

Published 07/07/2022, 09:28 AM

EUR/USD Daily Chart

  • EUR/USD bears have had a strong bear breakout with follow-through over the past two trading days.
  • This is a strong move below the 2017 low and the two-month trading range.
  • At the moment, the odds favor a second leg down from the two-bar breakout. However, this may be exhaustion from the year-long bear trend on the daily chart.
  • The market will probably have to get back to the 2017 low soon. Some bulls bought the low of 2017 and will likely scale in lower, so it is possible today is a big bull bar.
  • Most traders are better off waiting for more buying pressure before looking to buy.
  • Bears want a selloff down to 1.0000; however, that is 200 pips away, and at the moment, the odds favor a pullback to the 2017 low.
  • Overall, the two-bar breakout is strong enough to expect a second leg down, so traders will expect the first reversal up to fail.

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