The daily Forex chart rallied for 4 days from a wedge bottom. A rally from a wedge bottom typically has a 2nd leg up. Therefore, the odds are that the bulls will buy a 3 – 5 day pullback. The 2nd leg up should test today’s high and the top of the 3-month bear channel.
The bears want another lower high and then a new low. However, after 4 bull days, they will probably need a micro double top or a double top. Consequently, the 1st reversal down will probably form a higher low.
The 4-month trading range continues to have strong legs up and down. Traders are simply waiting for news from Brexit. Until then, they will keep looking for 3 – 5 day legs and then reversals.
Overnight EUR/USD Forex trading
The EUR/USD 5-minute chart sold off 40 pips overnight from above yesterday’s high. Today will probably be a bear day after a 4-day rally. Therefore, traders will sell rallies today.
The overnight bars are small and have prominent tails. This indicates a lack of energy. Day traders are looking for 10 pip scalps.
There will continue to be occasional 30 pip breakouts on minor Brexit news. But, until there is a major announcement, day traders will look for reversals.
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