The EURUSD daily Forex chart has a big bear bar so far today. This is the 3rd push down in 6 days and therefore a likely parabolic wedge sell climax. There is room to the measured move target from the May 14 double top bear flag.
The EUR/USD daily Forex chart sold off strongly again overnight. Every big bear bar or series of bear bars is a sell climax. After a parabolic wedge bottom on May 9, the bear trend resumed and now has 3 small pushes down. This is another parabolic wedge sell climax.
Today’s low so far is about 50 pips above the measured move target from the May 14 double top bear flag. There is a 60% chance of a minor reversal up from a measured move down from a double top bear flag. The minimum goal is TBTL Ten Bars and Two Legs up. Other targets are the 20 week EMA and the top of the sell climax at around 1.2000. The rally will be a bull leg in a trading range, which will probably last a couple months.
The bears want today to close below the May 9 low. That would create a gap between today’s close and the May 9 low. However, since this selloff is so extremely climactic and in a support zone around the December 12 and November 7 lows, the bears will probably be quick to take profits.
This will probably result in at least a small pullback above the May 9 breakout point. Since the bulls know this, they are probably buying here below the May 9 low for scalps. If there is a pullback above the May 9 low, they will make a profit. That would be an early sign that the strong bear trend is weakening and beginning to transition into a trading range.
Can the sell climax continue for several more weeks?
The bears want the daily chart to close below the May 9 low. That will create a gap between today’s close and that low. If the bears prevent a pullback above the May 9 low breakout point, that gap would then probably lead to a 300 pip measured move down to around 1.1400.
However, because of the consecutive sell climaxes, the bears are aware of the risk of a quick 200 – 300 pip reversal up coming at any time. This will make them take quick profits at the earliest sign of a reversal. It is therefore dangerous to sell a the bottom of a sell climax. Instead, the bears will begin to take profits at the lows and look to sell rallies.
Overnight EUR/USD Forex trading
The EUR/USD 5 minute Forex chart fell 100 pips in 3 legs overnight. This is wedge bear channel. Hence, the 5 minute chart will probably soon go sideways to slightly up today. Therefore, the bears will begin to sell 30 pips rallies and the bulls will buy reversals up from new lows for 10 – 20 pip scalps. Consequently, the chart will probably evolve into a 30 – 50 pip tall trading range this morning.
The 2nd leg down in the overnight wedge was very big. That probably reset the count. This means that it is now the 1st push down in a new wedge, and there will likely be one more minor new low this morning before there is a m