The forex market on the daily chart is reversing up from a sell climax at the bottom of a bear channel. Since there were 3 legs down, this is a wedge bottom reversal attempt.
All reversals up from sell climaxes begin with short covering. I said that the EUR/USD should break above the Feb. 5 low this week. It did overnight.
But how far up will it go? If the bears get a strong bear bar today, there might be one more push down before a 2-week rally. If not, the current rally will probably last a couple weeks and have a couple legs. It could test the Mar. 3 lower high, which was the top of the most recent sell climax.
Tomorrow is Friday and this week is becoming a buy signal bar on the weekly chart. The more the week closes on the high, the more traders will expect higher prices next week. The week will probably not close back at the low, so the EUR/USD will probably be sideways to up for at least another week.
Overnight EUR/USD Forex trading
The 5-minute chart of the EUR/USD forex market rallied in the Asian session to above the Feb. 5 breakout point. However, it has been in a tight trading range for the 6 hours since. Day traders have been buying and selling for 10-pip scalps.
Will the bears get a bear breakout and turn today into a Low 1 sell signal bar on the daily chart? Or, will the bulls either keep the day sideways or get a 2nd leg up? If the bulls win, tomorrow will probably be sideways to up as well.
So far, the EUR/USD is paying a lot of attention to the Feb. 5 low. It could continue sideways and then close a little above or below it.