The 240 minute EUR/USD Forex chart has been rallying for 4 weeks. Yet, the rally over the past 6 days has had many reversals and bear bars. It therefore is probably the start of a trading range.
While the daily EUR/USD chart has been rallying up from a higher low major trend reversal for 4 weeks, it has not yet strongly broken above the neck line. In addition, the rally is a wedge top on the 240 minute chart. Furthermore, it has been especially weak over the past 6 days. These 6 days look like a bull leg in a trading range. Hence, the EUR/USD chart will probably pull back to test the most recent higher low, which was Tuesday’s low.
Because the daily chart is at the neck line of a head and shoulders bottom, there is a 40% chance of a strong breakout and a measured move up. Yet, there is no breakout yet. There is a 60% chance of either a reversal back down in the 5 month trading range or the transition into a tight trading range.
Since the chart is at critical resistance, there is an increased chance of a big move up or down. But, the weakening of the rally over the past week makes sideways likely for a few days.>
Overnight EUR/USD Forex trading
The EUR/USD Forex market continued yesterday’s small range overnight. In addition, there is no sign of a breakout. Since the 4 week rally is stalling, the odds favor another trading range day today. However, since the chart is at critical resistance, there will probably be a big move up or down that starts within a week or two.