EUR/USD: Strong Breakout With Follow Through

EUR/USD
-0.02%

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EUR/USD-Daily Chart

• The EUR/USD formed a strong bull breakout with follow-through yesterday, closing far above the May high.
• While the rally that began on May 6th is climactic, it is strong enough that the first reversal up will probably fail.
• The risk is getting large for the bulls. This means that bulls will take partial profits on longs and increase the odds of the market getting pullback.
• The downside is probably limited, and the best the bears can probably get is one to two legs sideways.
• The bears hope to get a strong downside breakout that disappoints the bulls. The bulls will likely buy the first reversal down, and the market will get a second leg up.

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