EUR/USD Likely To Continue Trading Sideways

2022.06.22 16:56

EUR/USD Daily Chart

• The EUR/USD has been going sideways for 6 bars following the three-bar bear breakout ending on June 13.
• Bulls are trying to form a major trend reversal. It does not matter if you call it a higher low or a double top major trend reversal since both mean the same thing. It is important to remember that most major trend reversals lead to minor reversals and continued trading range price action and are not major.
• Bears have a Low 2 short below yesterday. However, it is a bull bar following a 5-bar bull micro channel, so probably buyers below.
• The market is deciding between testing the June low or the June 9 top of the bear breakout. While the odds may slightly favor the rally and test of the June 9 high, the probability is very close to neutral.
• It is possible the market has to sell off below the June low before it reverses up.
• The key point is that the market would not be going sideways, forming a tight trading range if one side had a probability advantage. Most traders are betting off waiting for a breakout or test of an extreme of the two-month trading range.

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