The daily chart of the EUR/USD has had 3 days down from a small bear flag. The selloff from the October 22 bear breakout has had weak follow-through. This means that it is more likely a bear leg in a trading range than a in a bear trend. A trading range has legs down and up. Even though the weekly and monthly charts are in bear trends, the daily chart has had weak momentum in the current test down of the April low. This increases the chances that the current leg down will bounce before it gets to that low. The bears might need a small double top with the November 12 or even the October 30 lower highs before they will be able to get their breakout below the April and March lows.
The 2-month selloff on the daily chart has been in a tight bear channel. A tight channel usually does not reverse into a bull trend. The first reversal up is usually minor and results in a trading range. Once in a trading range, the bulls hope to form a double bottom, which could then lead to a swing up. The bears will see the trading range as a bear flag. If the trading range grows to 20 or more bar, the probability of a bear breakout will drop to the same as the probability of a bull breakout. The market would then be in breakout mode, with each side having a 50% chance of a breakout, and a target equal to the height of the range.
The 60-minute chart has been in a tight bear channel for 4 days, and the 5-minute chart has been trading down for the past hour. If the bulls get a reversal up today or tomorrow, the candlestick pattern would be an expanding triangle bottom on the 60-minute and 240-minute charts. This is a type of major trend reversal, and it has a 40% chance of a swing up to the top of the pattern, which is the November 12 high around 1.0820.
If the bulls fail to get their bottom,, the downside is still probably limited over the next couple of weeks because the selloff has had a series of big bear breakouts on the 240-minute chart. This is exhaustive behavior and the bears usually will take profits and wait to sell higher. A big trading range usually follows a big series of sell climaxes. A big trading range on the 240-minute chart would probably last at least a week or two.
The 4-day selloff might continue today, but it is more likely that the day will be mostly sideways. The EUR/USD is oversold on the 5-minute chart, and the context is good for a reversal attempt over the next few days. That could lead to a test up to the 1.0820 top of the expanding triangle next week.