The EUR/USD weekly chart has rallied to within 15 pips of the November 9 lower high. It is still in a 2-year trading range. Since it has been making lower highs for almost 2 years, it is also in a broad bear channel.
The weekly EUR/USD chart has been in a trading range for 2 years. It has also been in a broad bear channel for most of that time. If it therefore begins to break above lower highs, traders will see the chart as being in a trading range and not a bear trend. The trading range is still in a 3-year bear trend. Yet, after going sideways for more than 20 bars, the probability of a bull breakout is almost as high as for a bear breakout. The bulls have a lower low major trend reversal on the monthly chart.
Overnight EUR/USD
The EUR/USD market has been sideways for 3 weeks after a strong rally. It is now at the resistance of the 1st of several major lower highs on the weekly chart. The follow-through buying after rallies on the daily chart has been week. Furthermore, the chart is now at a price that has led to many reversals down over the past 2 years. The odds therefore are that this rally will fail to break above the 2-year range. Yet, the momentum is strong and there is no sign of a top. Hence, the odds are that it will break at least a little above the November 9 lower high before going sideways for a month or two in a 200 pip range.
Because the EUR/USD has been in a 25 pip range for the past 6 hours, day traders have been scalping. While the momentum up on the daily chart favors a break above the November 9 high, there is no sign that the breakout will come today.