The EUR/USD technical chart points at continuing consolidation

The EUR/USD daily Forex chart is now testing the bottom of the 3 day tight trading range from 2 weeks ago. The selloff lacks consecutive big bear bars. It is therefore more likely a leg in the 2 month range than a resumption of the May bear trend.

The EUR/USD daily Forex chart is turning down from below the June 14 sell climax high. However, after the extreme parabolic wedge sell climaxes in May, the odds are that the 2 month trading range will continue. The minimum goal is the test of the June 14 sell climax high.

While the daily chart has sold off for 4 days, it is in the middle of the 2 month range. There is additional support at the bottom of the 3 day tight trading range from 2 weeks ago. The odds are that the chart will begin to go sideways here and then have another leg up.

Less likely, this 4 day selloff is a resumption of the May bear trend. But, the bears will need to get consecutive big bear bars to convince traders that the trend is resuming. In addition, they will need consecutive closes below the June low.

Even if they get a breakout below and a 300 pip measured move down, a trading range late in a bear trend is usually the final bear flag. Therefore, traders will expect a reversal back up into this trading range within a couple of months.

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