EUR/USD: Failed Breakout Below September Low

EUR/USD-Daily Chart

• EUR/USD bulls formed a strong reversal yesterday after the bears failed to break below the September 27th high.
• The bears got a downside breakout on October 2nd below a Low 1 short that was formed on the prior day.
• While the October 2nd bear breakout was a surprise, the odds favored buyers below the September 27th low.
• The selloff that began in July this past year is getting climactic, increasing the odds of a trading range forming soon.
• The bears have kept the market away from the moving average for over 20 bars, another sign of climactic behavior. This increases the odds of a test of the moving average soon, and the difficulty of the moving average may be already underway.
• Overall, the market will probably reach the October 2nd Low 1 short and allow the trapped bulls to make money.

Source

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