x
Breaking News
0

EUR/USD Should Test Down This Week

By Al BrooksForexJun 19, 2017 09:12AM ET
www.investing.com/analysis/eurusd-should-test-down-this-week-200195964
EUR/USD Should Test Down This Week
By Al Brooks   |  Jun 19, 2017 09:12AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

EUR/USD Day Chart
EUR/USD Day Chart

The 240 minute EUR/USD chart is still in a trading range. The bulls see a 5 week bull flag. The bears see a wedge top and now a lower high major trend reversal. Since the market has inertia, sideways is most likely for at least a few more days.

The EUR/USD daily chart stopped just 4 pips below the November 9 lower high. The bears therefore want a big double top. The bears also want a small double top bear flag with the June 15 top of the sell climax.

The bulls see a pullback from a test of the major resistance of the November 9 major lower high. The momentum up in May was strong. In addition, the weekly chart has been in a trading range for 2 years. Furthermore, legs in trading ranges often go above resistance before reversing Consequently, the odds still favor a break above the November high within a few weeks.

Trading ranges resist change

Yet, the odds are that the 2 year trading range will continue. Hence, the bull breakout will probably just be part of the 6 month bull leg in the 2 year trading range. Therefore the odds are against the start of a bull trend on the daily or weekly charts.

If the bears break strongly below the May 30 bottom of the trading range, then the odds would favor a test down below lower support. That includes the breakout point above the March 31 top of the 5 month trading range.

Since markets have inertia, the odds are that they will continue to do what they have been doing. The daily chart has been going sideways for 5 weeks. It has reversed every couple of days. Therefore, the odds are for at least several more sideways days.

Overnight EUR/USD Forex trading


The EUR/USD chart has been in a 30 pip range for 6 hours. The odds favor at least one more leg down after last week’s strong reversal down from a test of the November 9 major lower high. Yet, the minimum target is only the bottom of the 1st leg down. That is only about 50 pips from here.

In addition, there is still room up to the top of Thursday’s sell climax. That is always a magnet. As is always the case, there are always reasonable arguments for both bulls and bears when a market is in a trading range. The result is that whenever the market goes downs, bulls buy more and the bears take profits. When it goes up, the bears sell more and the bulls take profits. With everyone buying low, selling high, and scalping, trading ranges can last a long time.

Because the moves have been small overnight and the market is in the middle of its 4 week range, day traders will mostly scalp.

The odds favor a test down to the bottom of the 4 week trading range over the next few days. However, the bulls will probably get a bounce there. They will try to create a double bottom bull flag on the daily chart with the May 30 low.

EUR/USD Should Test Down This Week
 

Related Articles

EUR/USD Should Test Down This Week

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

 
Are you sure you want to delete this chart?
 
Write your thoughts here
 
Replace the attached chart with a new chart ?
Post
Post also to:
1000
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
 
Replace the attached chart with a new chart ?
Post 1000
Please wait a minute before you try to comment again.
 
 
 
Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Add Chart to Comment
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email