The yen and Canadian dollar were strong overnight. The EUR/USD was in a trading range overnight, as it has been for 4 days.
The daily chart of the EUR/JPY broke below a wedge bear flag last week and is falling toward the bottom of the July 9 bear channel at 133.30, which is 140 pips below. The overnight selling on the 5-minute chart is in its second leg down. The rally after the first leg down last night was strong, and this means that there is a 40% chance that the bulls will be able to create a swing up today from a lower lower major trend reversal. However, there is a 60% chance that the best the 5-minute bulls will get is a trading range and those trading Forex markets for a living will focus on selling rallies until there is a clear bottom or a strong reversal up. They will begin to buy new lows and scale in lower for scalps. The USD/JPY has a similar 5-minute chart.
The USD/CAD 240-minute chart is deciding whether the swing down has begun or if there will be one more new high before the swing down begins. Once it is clear that the bears have taken control, the first target is the bottom of the wedge, which is around 1.2900, 300 pips below. Although there was a strong bear breakout last night, the pullback from the first leg down was strong. Traders learning how to trade the markets have to be aware that, like with the EUR/JPY, a strong pullback is followed 40% of the time by the final bear leg before the market creates a swing up.