The forex market on the daily chart is in an early bear trend. The bears see the 2-week rally as a wedge bear flag at the EMA and the September 2018 high.
They triggered the sell signal yesterday, but yesterday was a bull day. The bears will try to get a 2nd reversal down within the next few days.
They need a couple bear days to convince traders that the month-long bear trend is intact. Their minimum goal is a test below the June 10 high, which was the breakout point of the July rally. They also want a measured move down from the 2-month trading range.
The rally from the September low is a Small Pullback Bull Trend. The bulls want it to break strongly above Tuesday’s high, which is the top of the wedge bear flag. They then want a break above the September 10 lower high.
Finally, the want a couple closes above the September 1 high. If they achieve those goals, traders will look for the rally to continue up to 1.25 at the February 2018 high.
Even though the EUR/USD is still in a 3-month trading range after a 4-month rally, the weekly chart (not shown) has a wedge rally to resistance. Consequently, the odds are still in favor of a test down to the June 10 high before there is a break above the September high. However, a few consecutive bull days will reverse those odds.
Overnight EUR/USD Forex Trading
The 5 minute chart of the EUR/USD Forex market has been in a tight trading range for 7 days. This continued overnight. Day traders will continue to look for reversals and small profits. The overnight range has been so small that the scalps have only been 10 pips.
Today’s high is exactly at yesterday’s high. Yesterday was a High 1 buy signal bar in a 2-week Small Pullback Bull trend. However, the bulls so far have been unable to trigger the buy.
Can today reverse down strongly from a micro double top with Tuesday’s high? Can it break strongly above Tuesday’s high? There has been no energy for 7 days. The odds are against a strong trend today. A trend can come at any time, but day traders will continue to scalp reversals until they see a strong breakout up or down.
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