The EUR/USD forex market on the daily chart is reversing up from a double bottom in a 6 week trading range. It broke above the September 2018 high, and the reversal up is also from a test of that level.
However, it is still in a trading range, which means that it is in Breakout Mode. There is about a 50% chance of a successful breakout up or down. Traders are looking for reversals every few days and are unwilling to hold onto positions. They will continue to do that until there is a clear breakout.
Overnight EURUSD Forex trading
The EUR/USD Forex market is reversing up from the bottom of a 6 week trading range. Yesterday was a buy signal bar. Today traded above yesterday’s high, which triggered the buy signal on the daily chart.
The EUR/USD is currently at the high of the session on the 5 minute chart. The bulls want the day to close near its high and far above yesterday’s high. That would increase the chance of higher prices tomorrow.
The bears always want the opposite. They therefore would like today’s breakout to fail. That means they want today to close below yesterday’s high. Ideally, they want today to close on the low of the day. Today would then be a Low 1 sell signal bar on the daily chart for tomorrow.
Bull trend on the 5 minute chart
So far, the bulls have the advantage. The 5 minute chart has been consistently making higher highs and lows since today began. It is therefore in a bull trend.
It is now at the high of the session, but there was a big bull bar 15 minutes ago. That often will attract profit takers. If it does, it would probably result in a trading range for the next hour or two and possibly for the remainder of the day.
The bulls have already done all that they need to do on the daily chart. If today closes around where it is currently, traders will expect at least slightly higher prices tomorrow.
So far, day traders have only been buying, both for scalps and a swing up. If the 5 minute chart has a 20-30 pip pullback, day traders will conclude that the bull trend is evolving into a trading range. Day traders would then begin to sell reversals down for scalps. They will continue to buy, but will switch to buying pullbacks from buying at the market.
Can today reverse down? Yes, but the bears will probably have to first stop it from going up and create a trading range. The odds favor sideways to up for the rest of the day.