EUR/USD: Nested Wedge Tops

EUR/USD Daily Chart

• The EURUSD formed a strong bear close yesterday below the 20-period moving average.

• The bears are hopeful that today will become a strong follow-through bar, increasing the odds of lower prices. The bears will likely be disappointed by todays follow-through bar, and it will be either a bull trend bar or a bear doji bar.

• The market is around the midpoint of the December rally. Some bulls will buy here, trying to form another higher low in the bull trend that began back in October.

• While yesterdays bear breakout bar is enough to make the market Always In Short, some traders will assume that the bears need one more bar to make it Always In Short.

• Broad bull channels often have pullbacks that become Always In Short. The bulls are hopeful that this is one of those pullback that will lead to higher prices.

• Because of the nested wedge tops (see chart), the odds favor the bears getting a second leg down.