Yesterday was the sixth day in the past 8 days with a small body. This is a sign of a loss of momentum in .
The Small Pullback Bull Trend is intact, but these doji bars increase the chance of a pullback for a couple weeks beginning soon.
There are consecutive micro wedges, which increase the chance of a pullback soon. It might be underway.
Wedge typically leads to a couple legs down. Yesterday could be the start of a 2-week pullback.
The bulls want the tight bull channel to continue to above the February 25 high, and then the January high.
The EUR/USD has been in a trading range for 9 months. Trading ranges resist change.
This rally is therefore more likely a bull leg in that trading range, than a resumption of last year’s bull trend.
If so, the rally should soon stall, and the EUR/USD should go sideways to down for a couple weeks.
Yesterday had a bear body but a big tail. It is a weak sell signal bar, especially since it is coming in a tight bull channel.
The EUR/USD might have to go sideways for a few days before it can go down.
Today is the final day of April.
April totally reversed the March selloff on the monthly chart, and it broke slightly above the March high.
The bulls want April to close above the March high, which would slightly increase the chance of higher prices next week.
The overnight selloff make it more likely that April will close below the March high. That would increase the chance of May being sideways to down.
Overnight EUR/USD Forex trading on 5-minute chart
By breaking below yesterday’s low overnight, the EUR/USD triggered a sell signal for consecutive wedge tops.
Bulls are taking profits on the daily chart, and others are shorting, betting on a couple legs down over the next 2 weeks.
Bulls want today to close back above yesterday’s low. Today would then be a weak entry bar on the daily chart, and the bulls might then continue their Small Pullback Bull Trend.
Bears want today to close near the low of the day. That would increase the chance that the Small Pullback Bull Trend on the daily chart has ended, and a 2-week reversal down has begun.
The overnight selloff has been in a tight bear channel. Day traders have only been selling.
If the bears begin to take profits and the overnight bear trend evolves into a trading range, day traders will also begin to buy for scalps.
Most likely the overnight strong bear trend will transition into a weaker bear trend and possibly a trading range. But unless there is at least a 20-pip bounce, day traders will only sell.
If today transitions into a trading range, day traders will begin to buy for scalps.
There is a 20% chance that today will form a major trend reversal on the 5-minute chart, and it will close back up near the high.