The EUR/USD daily Forex chart has sold off for 3 days after a lower high double top with the June 14 high.
The EUR/USD daily Forex chart sold off for 3 days from around the EMA and the June 14 high. But, the selloff so far lacks consecutive big bear bars. In addition, it is around a 50% pullback from the June 9 rally. Finally, the June 14 sell climax high is a strong magnet. Therefore, the selloff will more likely stall and become a higher low in the 2 month trading range.
The bulls will buy a micro double bottom between 1.1600 and 1.650 over the next week. They will look for a test of the June 14 high at around 1.1850. The odds are that the bear rally will continue up to the May 14 high and 1.2000 over the next couple of months.
The bears will probably need to get to the June 14 sell climax high before they can resume the bear trend. However, if they get 2 closes below the June 21 low, then traders will expect a 300 pip measured down below the 3 month range.
The EURUSD 5 minute Forex chart was in a 20 pip range during the Asia session. The range expanded to 30 pips in Europe. This represents weak follow-through selling after Wednesday’s bear trend.
Because the daily chart is now around a 50% retracement of the 4 week rally, bulls are beginning to buy. This is the buy zone. There is therefore an increased chance of a bull trend day today or tomorrow. More likely, yesterday’s selloff created a Big Up, Big Down pattern on the daily chart. That usually results in at least a few sideways days.
It is unlikely that the bear trend is resuming on the daily chart. But, if the bears get 2 – 3 consecutive big bear days, the 2 month trading might be ending. Traders will swing sell in the unlikely event of a big bear trend day today.
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