The 60-minute EUR/USD Forex chart has met the minimum objective of the Lower Low, then Higher Low, Major Trend Reversal. It has had at least 2 legs and ten bars up to around a measured move.
The 60-minute EUR/USD Forex chart reversed up from a Final Bear Flag yesterday. Yet the reversal lasted only 1 hour. While the bulls might get a couple days of sideways to up trading, the daily chart is still in a bear trend. Hence, bears will look to sell a rally.
Because of the uncertainty of the upcoming election, the EUR/USD chart might enter a trading range over the next 2 weeks.
Overnight EUR/USD Forex
Because of the Spike and Channel Sell Climax on the 60-minute chart last week, I have been writing that there would soon be a 2-legged bear rally. The EUR/USD market met the minimum objective. There is still some room to the top of the channel. Yet, it could easily pull back 20 pips to test the breakout point at the top of the trading range.
When there is a major reversal, the EUR/USD Forex market is more likely to begin a big trading range than a bull trend. That is what is likely here. Hence, this rally is a probe to find the top of the range. It is often at the top of the bear channel in the Spike and Channel bear trend. There, the rally will probably test down today or around 20 pips higher, at the 1.0945 top of the bear channel.
What follows a Spike and Channel Bear Trend?
The bears want a double top bear flag with that October 20 lower high. In addition, they then want a measured move down from below this week’s low, which is the neck line of the double top. The bulls will buy a reversal down. Hence, they will try to create a protracted series of higher low. That would therefore be a bull trend. Yet, what usually happens is a deep selloff to higher low, and then one more rally. At that point, both bulls and bears will be disappointed and confused. As a result, the EUR/USD would be back in a trading range and in breakout mode again.