The daily chart of the EUR/USD Forex market had a big bull bar on Friday. There was a parabolic wedge sell climax into the April 2017 gap. Last week’s low got to within 1 pip of closing the gap.
The sell climax down to major support compelled bears to take at least partial profits and for bulls traders to buy. However, the February selloff was surprisingly strong. Therefore the 1st reversal up will probably be minor. That means it will lead to either a bear flag or a trading range.
Traders do not believe that the bulls have a reasonable chance of getting a bull trend without first creating at least a small trading range and a double bottom. But traders do expect at least a couple weeks of sideways to up trading to begin soon.
It might have begun on Friday, but there might be a brief plunge to below April 7, 2017 high first. That would close that gap on the daily and weekly charts. The minimum goal for a minor reversal up is a pullback to above the October low and up to the EMA.
Overnight EUR/USD Forex trading
The 5 minute chart of the EUR/USD Forex market has been in a tight range overnight in the middle of Friday’s range. The bulls are not yet getting follow-through buying. This increases the chance that the EUR/USD will have to close the gap above the April 7, 2017 high before there is a 2-week short-covering rally.
If today remains an inside bar on the daily chart, it will be a breakout mode bar for tomorrow. That means it would be both a buy and sell signal bar. The bears want today to close near its low. That would make today a stronger sell signal bar. The bulls want today to close near its high and be a stronger buy signal bar.
While today could become a big trend day up or down, it will probably remain small. It is disappointing the bulls who wanted strong follow-through after Friday’s big bull day. They will be hesitant to buy aggressively. Friday disappointed the bears and now they, too, are hesitant.
