The EURUSD 240 minute Forex chart has been in a trading range for 3 weeks. The bulls want trend resumption up from a double bottom. Yet, the bears want a trend reversal down from a double top lower high major trend reversal.
The daily chart of the EUR/USD Forex market has been sideways for 3 weeks. It is testing its 20 day exponential moving average. While this is normally a buy setup, it is coming after a buy climax. Furthermore, the monthly chart is at resistance at the top of a 2 year trading range. Finally, the parabolic wedge rally began with the July 26 low, and that low is therefore a magnet. Consequently, the odds are slightly greater that the current pullback will test that low before breaking to a new high.
However, because the rally on the weekly chart is in a tight channel, even if the reversal continues down to the July 5 low, it will still more likely be simply a leg in a big trading range than the start of a bear trend.
Overnight EURUSD Forex trading
The 5 minute chart has been in a 30 pip range for the past 5 hours. Furthermore, it is testing the bottom of the 3 week range. The location is good for the bulls. Yet, there is still a magnet below at the July 26 low. The odds still favor a test of that low. Therefore, day traders are ready to swing trade their shorts if there is a strong bear break below yesterday’s low.
In addition, because the 240 minute chart is at the bottom of a 3 week range, they will swing trade a strong reversal up, betting that the bull trend on the daily chart will resume. While they wait for a breakout up or down, they will continue to look for 10 pip scalps, betting that the trading range will continue, but knowing that it will probably breakout within the next week.