The 240 minute EUR/USD chart has been trading down in a Wedge Bear Channel for 4 days. Most of the bars were small dojis and there have been many reversals. This type of trading range price action is usually a bear leg in a trading range and not the start of a bear trend.
I mentioned yesterday that the selloff of the past 24 hours was more likely simply a test of the bottom of the month long-trading range. While that is still true, the test is not complete, and a test can fail. By fail I mean that the EUR/USD can fall below support and sell off to some lower support level.
The 60 and 240 minute charts are still in weak bear channels. While the selling has lacked momentum, there is no sign of a bottom yet. This is a good area for the bulls, but they need a strong reversal before traders believe that the bear leg has ended.
Furthermore, the bears need a strong breakout below the range. There is no evidence for this yet. Because most trading range breakout attempts fail, the probability is that the EUR/USD Forex chart will reverse back up within a couple of days. The first target is the July 18 lower high of 1.1084.
European EUR/USD Forex session
The 5 minute EUR/USD Forex chart overnight sold off and reversed back up. It is now in the middle of its 40 pip range. It is probing near the bottom of the month-long trading range. There is no sign of a bottom yet. Day traders are mostly scalping for 10 – 20 pips, which is what they usually do when the sessions have small ranges and lots of reversals.