– EUR/USD is currently trying to break below the January lows.
– The bears are hopeful they can get a strong bear close today, demonstrating more follow-through after the three-day bear breakout ending on Jan. 18. They are hopeful this selloff will break below the November 2021 lows.
– Even if the bears get below the November lows, traders will likely see the bear breakout as a final flag reversal setup and look for reasons to buy.
– The selloff from Jan. 14 is likely in a tight enough channel that the first reversal up will probably fail, and the market will have to go sideways, forming at least some kind of a double bottom.
– So far, today is a big bear bar. However, when you look to the left, it is a trading range, which makes the odds higher that something will be disappointing for the bears either today or tomorrow.
– The bears need to get a decent close today and follow through to convince traders that the selloff may reach the November 2021 low.