The EUR/USD daily Forex sold off for 3 days and is trying to form a double bottom with the October 9 low.
After 2 big bear days down from a small wedge higher low, the EUR/USD daily Forex chart is testing the October 9 low. While it might briefly break below that low over the next week, the odds are against a break below the April 15 low. Therefore, traders will begin to look for a 1 – 2 week leg up in the 3 week trading range. That trading range is in the middle of a 6 month trading range. Since trading ranges resist breaking out, traders will continue to look for reversals after every strong 1 – 3 week move up or down.
Overnight EUR/USD Forex trading
The EUR/USD 5 minute Forex chart has been in a 40 pip range overnight. It reversed up from 1 pip above the October 9 low.
The 4 day selloff has been climactic and in a parabolic wedge on the 240 minute chart. Traders will look for the selling to dry up within a few days. They then expect a base and a rally that retraces about half of this week’s selloff.
There is no sign that the 3 week range or the 6 month range is about to convert into a trend. After a sell climax this week down to support, day traders expect a trading range day and then a bounce. The bulls might need a micro double bottom on the daily chart before the next leg up.