The EUR/USD daily chart has had 3 rallies off the March 2 low, which means that this is a wedge rally. The reversal up on March 10 was strong enough to reset the count, which means that many day traders will expect one more brief push up before a pullback. It is too early to know whether more computers will conclude that the rally top is in or if there will be one more push up before they take profits. Once the computers take profits, there will be a pullback that will have at least a couple of small legs sideways to down on the daily chart.
As strong as the 3-week rally has bee, it still has not gone above any significant high on the daily chart, which means that it is only a bull leg in a trading range. If it does start to breakout above prior lower highs on the daily chart, then traders will begin to think that the past year has formed a small double bottom on the monthly chart. A rally above the August neck line would project to 1.2900, which is far above the bottom of the 7-year trading range. The odds are still against this. Instead, a breakout above the August high will probably fail, and the yearlong trading range will still have a higher probability of a bear breakout. It is still a bear flag unless the bulls get a strong breakout above that August high just above 1.1700.
The 60 minute chart is in a 3-day bull flag. If there is a bull breakout, it would be the 3rd push up from the March 10 low, and it will probably fail. That means that this bull flag would then be the final bull flag in the rally, and it will probably be followed by 5 – 10 days sideways to down. The bull flag has had 3 pushes down on the 60 minute chart since the March 17 high. This means that it is a wedge bull flag. Although the bulls began to get their breakout 4 hours ago, the follow-through has been bad. The bears still hope for a bear breakout below the bull flag. This would mean that the top for the next couple of weeks was made last week. The odds still favor a 3rd push up on the 60- and 240-minute charts before the pullback begins.
The reason why a pullback in the strong 3-week rally is more likely than a successful breakout above the February high is that the rally has contained 2 strong buy climaxes. When that happens, there is usually a pullback to work off the extreme buying before a breakout will succeed. When the market rallies fast, bulls have windfall profits and their stops are far. They take partial profits, and that creates a pullback. If they see that the bears fail at reversing the market, they buy again and the rally resumes.
The pullback on the 5 minute chart over the past 2 hours has enough bars to increase the chances that the overnight rally will stall. This means that today will probably be a trading range day. Because the 60-minute chart is trying to break above a bull flag, day traders will be quick to buy if the EUR/USD starts to trend up. The 3-day selloff on the 60-minute chart has been in a relatively flat, broad bear channel. It is more likely a bull flag than the start of a bear trend. This means that bears will only scalp unless there is a strong bear breakout below the 3-day bear flag.