The EUR/USD formed a Bull breakout last week that reversed down, trapping the bears.
Every breakout is a surprise, and surprises usually get 2nd legs. However, instead of the bulls getting a second leg up, they got trapped by the consecutive bear trend bars last week.
The downside breakout trapped the bulls, meaning traders will expect a second leg down and the first reversal up to fail.
At the time of writing this, the bears are trying to get a downside breakout and a test of the May 31st low.
The bulls will try to create a failed breakout below the August low. Next, the bulls want a reversal back to the August 30th close.
Today, it will be important to see if the bears are determined enough to get a strong bear close or if the bears will take profits early today, creating a big tail below the bar.
Overall, the bears are hopeful that the August 30th rally will act as a double top that leads to a measured move down. While this is possible, the bears need a strong breakout below the August 25th neckline of the double top before traders will conclude there is a high probability of a measured move down.
