The EUR/USD formed a sell climax last week and went below the May 31st low.
While the bears have done a good job getting to the May 31st low, the market is forming consecutive sell climaxes. This will increase the odds of a pullback and possible test of the moving average.
Some bears sold the September 14th breakout and were disappointed by the bad follow-through. They may look to buy back shorts at their original entry, the September 14th close.
The bears hope they can break far below the May 31st low. However, the bears will likely be disappointed, and the market will test the moving average soon.
Since the September 14th bear breakout is a possible exhaustion bar, the bulls will want a test of the bar’s high.
