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Published On: Thu, Aug 10th, 2023

EUR/USD Anticipated to Trade Within Narrow Range

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The EUR/USD currency pair has exhibited a tight trading range spanning 8 bars in recent sessions. In the absence of a distinct breakout from this constrained trading range, traders are advised to consider that the current price action is likely to persist without a clear direction.

Bullish participants are making efforts to defend the high of the buy signal bar observed on July 6th. Despite the August selloff, the bears have been unable to breach this high, indicating strength on the side of the bulls.

In order for the market to potentially initiate a rally lasting for several sessions, it might need to achieve the high witnessed on July 6th. Although the decline from the July peak has not been extensive enough to transform the market into a trading range, it also hasn’t constituted a bear trend. This implies that traders should prepare for an imminent rally in the coming weeks, potentially approaching a 50% retracement of the August selloff.

If the bullish side manages to orchestrate a modest rally, the bearish participants might attempt a significant trend reversal, leading to a potential second leg down following the August selloff.

In conclusion, traders should expect the bears to experience ongoing disappointments post the August 3rd low selloff, accompanied by a subdued rally spanning a couple of weeks.

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