o The EUR/USD Forex market broke strongly below the 9-week trading range yesterday. It also broke below the June 19, 2020 higher low, which was the start of the 2020 bull channel.
o The bears want a 200-pip measured move down.
o They hope the yearlong bear trend will continue down to the 2020 low and then below the bottom of the 7-year trading range.
o Yesterday was a bear surprise bar. Traders should expect at least a small 2nd leg down after the 1st bounce.
o Today is the follow-through bar. So far, it is a bull doji, which is weak follow-through.
o The more it is a big bear bar closing near its low, the more likely the EUR/USD will continue lower.
o The bulls want a bull day today or Monday, and especially a big bull bar closing near its high. That would be a sign of a possible failed breakout.
o I have been saying that the bear trend was unlikely to go straight down to 2020 low without at least a couple months of sideways to up trading 1st. While it was likely that the pause would have gone higher, it still met my minimum goal of 2 months of sideways to up trading.
o That relieved some of the oversold condition, and bears are now more confident about selling again.
o The monthly chart has been sideways for 7 years. Since trading ranges resist breaking out, it is still more likely that this selloff will reverse up for many months before breaking below the 7-year range.
o However, the more consecutive bear bars, the higher the odds will be of a successful breakout.
o The next target for the bears is the bottom of the yearlong bear channel, which is another 100 pips below.