– broke yesterday a little below June 18 sell climax low.
– It closed just above that low, so this is a weak breakout so far.
– Today broke further down, but reversed up after the unemployment report.
– If today closes near its high, traders will see the past five days as a micro wedge bottom. That would increase the chance of a bounce next week.
– June 25 sell signal bar was only a doji and the selloff since then has not been very strong. This increases the chance of a bounce within a few days.
– Bulls want a lower low double bottom with June 18 low and then a breakout above June 25 high, which is the neckline of the double bottom.
– Bears want the selloff from the May 25 high to break below the March 31 low, which is the neckline of the Jan. 6/May 25 double top. It is also near the Nov. 4 low, which is the bottom of the yearlong trading range.
– Since EUR/USD has been sideways for a couple weeks and is now at the bottom of a possible small trading range, it should bounce soon.
– Reversal down to June 18 low was strong enough for traders to expect a test of the March 31 low before there is a strong breakout above the June 25 high.
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