EUR/USD Forex daily chart
EUR/USD is having a small bull day so far today. The double bottom bull flag since the June 4 low has seen a 3-week selloff. It's still a pullback from the rally that began on May 13. It's also in a wedge bull flag as well. Bulls want a bull bar today to increase chances of a couple legs up over the next couple weeks.
On the other hand, bears want a bear bar today to increase chances of a break below the May 13 low and test of the bottom of the 2-month trading range from the May 13 or May 5 low. While in a trading range, reversals are always more likely than successful breakouts. Even if bears get a break below the May 5 low, a reversal up will be more likely than a measured move down.
Overnight EUR/USD forex trading on 5-minute chart
- Small trading range and inside bar (low above Friday’s low) so far today.
- Day traders have only been scalping.
- Bears want the trading range to be a bear flag after Friday’s big bear trend. They therefore want trend resumption down.
- Bulls hope Friday was just a sell vacuum test of support at the June 4 low. They want a successful test and for EUR/USD now to turn up and test the May 25 high again.
- The minimum that the bears want is a bear body today on the daily chart. That would confirm Friday’s breakout below the June 4 low, and increase the chance of lower prices this week.
- The minimum that the bulls want is a bull body. Today would then be a buy signal bar on the daily chart for a failed breakout.
- Today could remain small all down, with day traders continuing to scalp up and down.
- It is still possible for a series of strong trend bars, up or down, and a trend.
- However, it is becoming more likely that today will remain small, and that traders will bet that breakouts will fail. They have been focused on how the day will close relative to the open.
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