The EUR/USD and USD/JPY are still in 150 pip trading ranges, and traders are buying low, selling high, and taking quick profits. There will be a breakout and it will last hundreds of pips, but until there is a breakout, day traders will bet that the reversal will continue and they will be quick to take profits.
The most interesting forex cross is the USD/CAD. It is at the bottom of a buy climax. If it reverses up from here, it would be an expanding triangle bottom with the August 31 and September 18 lows. The first target is yesterday’s lower high around 1.3130, then a 50% correction at around 1.3200. Traders will be looking to buy a reversal up today or tomorrow for a 150 – 200 pip swing trade. If there is no credible candlestick pattern, but instead the market begins to rally strongly, they will buy the bull breakout. Because the 60 minute chart is in a bear trend, it could fall much further from here, but since the current selloff is in a very tight channel and it has lasted about 100 bars, the odds are that the bulls will get a bounce soon.