The daily chart of the Forex market is rallying to the top of its 6 month trading range. Yesterday closed above the October/December double top.
Today will probably have another bull close above that resistance. Traders will therefore look for a test of the next resistance level. That is the August 6 top of the 6 month range.
A more important resistance level is the June 25 high (not shown) of 1.1413. This rally is strong enough to make traders believe that it will reach that magnet within a couple months. The odds are increasing that the 2 year bear trend has ended.
Overnight Forex Trading
The 5 minute chart of the Forex market has rallied 35 pips overnight in a tight bull channel. That means the bears are not selling and that traders are buying at the market.
Because the bars are small and many have prominent tails, the bull trend will probably evolve into a trading range within a hour or so. Once it does, the bulls will switch to buying pullbacks and scalping. Also, if the range is at least 20 pips tall, the bears will begin to sell rallies, hoping for 10 pip scalps.
Today is the final day of the year and the decade. While it traditionally is quiet, there is an increased chance of a surprisingly strong move up or down, especially in the final hour. Much more likely is that today will become a relatively tight trading range for the rest of the day.
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