o Bear bar after three small legs up in tight bull channel, so parabolic wedge top.
o Bears hope this is end of leg up in bear channel that began on Jan. 6, and want breakout below March low.
o 7-day tight bull channel, so only 3- to 5-day pullback likely.
o March low was wedge bottom, so second leg up likely.
o Yesterday traded below Wednesday’s low, and then above its high, and it was, therefore, an outside up day.
o Today so far has not broken out of yesterday’s range, and is, therefore, an inside day after an outside day.
o So far, there is now an ioi (inside-outside-inside) pattern on the daily chart. If today remains an inside day, then this is a Breakout Mode pattern for Monday. Today would be both a buy signal bar, and a sell signal bar.
o But if today remains a bear day with a close near its low, it will be a weak buy signal bar, especially after a parabolic wedge. That makes a pullback more likely than a continuation of the bull trend on Monday.
Overnight EUR/USD Forex Trading On 5-Minute Chart
o Reversed down in Small Pullback Bear Trend from yesterday’s close.
o Biggest overnight rally was less than 20 pips, so day traders have only been selling.
o Near yesterday’s low and today is about the size of an average day, so selloff will probably evolve into a trading range soon.
o Until there is at least a 20-pip bounce, day traders will only sell.
o Once there is a 20-pip bounce, day traders will also begin to buy for scalps.
o Bulls might be able to keep today from falling below yesterday’s low. Today would then remain an inside day, and there would be an ioi breakout mode pattern on the daily chart on Monday.