The Forex market on the daily chart has been sideways for 4 months after a strong summer rally. A triangle has formed over the past 6 weeks. It does not matter what you call it. All that is important is that the chart is sideways around the September 2018 high with the bulls and bears alternating control every week or two.
Every trading range is also both a bull and bear trend. This is a Breakout Mode pattern. Traders believe the market is balanced and that there is about a 50% chance of either a successful bull or bear breakout.
A bear trend needs lower highs. If the bulls get a break above the Sept. 10 high, traders would stop thinking that there is a bear trend.
A bull trend needs higher lows. If the bears get a break below the Sept. 25 low, traders would stop thinking that the EUR/USD is still in a bull trend.
The EUR/USD is now at the September 2018 high, which has been resistance for 4 months. Furthermore, there have not been more than 2 strong bull days since August. Therefore, the 2-day rally might stall tomorrow instead of continuing straight up to test the September 10 high.
Overnight EUR/USD Forex Trading
The 5-minute chart of the EUR/USD Forex market overnight continued yesterday’s rally. Day traders have only been buying. However, the EUR/USD is now back at the September 2018 high, which has been the most important price for 4 months. Consequently, the 2-day rally will probably begin to stall today or tomorrow.
But until there is a 20–30-pip pullback, day traders will continue to only look to buy. Because the daily chart is now at resistance, the bulls will start to take profits. This should create a 20–30-pip pullback today. If it does, day traders will begin to sell reversals down from prior highs for scalps, in addition to looking for buys.
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