EUR/USD: Traders Continue To Look For Reversals


EUR/USD Daily Chart.

On the chart:

– Three-week tight trading range nested within a three-month trading range, which is nested within five-year trading range. Traders continue to look for reversals on daily, weekly and monthly charts.

– Yesterday was sell signal bar for lower high reversal, but the pattern from the May 25 high was small and, therefore, traders expect only a minor reversal.

– Today triggered the lower high sell signal, but it is a reversal within a three-week trading range, and it is more likely to last only one to three days.

– The bears want a reversal down from a wedge rally to a double top on the daily chart, but the EURUSD continues to reverse every few days.

– Traders will continue to look for reversals until there are at least a couple consecutive trend bars in either direction, and a breakout of the three-week tight trading range.

Overnight EUR/USD Trading On 5-Minute Chart

– Sold off in a strong bear trend overnight. By going below yesterday’s low, today triggered a sell signal on the daily chart.

– Once the selloff got to the bottom half of the three-week range, it reversed up about an hour ago.

– The reversal up has been about 25 pips. That is enough for traders to expect the overnight bear trend to convert into a trading range. The odds are now against much lower prices today.

– Big down, big up creates big confusion. That typically leads to a trading range.

– Day traders will switch to selling rallies, and scalping from selling at the market and swing trading.

– They will also now buy dips for scalps.

– Trading range likely for at least a couple hours.

– The fight will be over the mid-point of the day’s range and the open of the week. It will probably be about the middle of the developing trading range.

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