EUR/USD Double Bottom And Failing Oo Bear Flag
Al Brooks | Jun 20, 2018 09:23AM ET
The EUR/USD daily Forex chart has been sideways for 4 days after last week’s big selloff. The bears want this to be a 4 day bear flag. However, a reversal up from a double bottom with the May 29 low is slightly more likely.
The EUR/USD daily Forex chart sold off strongly last week, but stalled at the May 29 low. The bulls want a double bottom reversal up to test the June 14 sell climax high. The odds are that the daily chart is in a trading range, even if there is one more small leg down.
The bears have consecutive outside days (outside, outside so oo pattern) after last week’s big bear day. This is an oo bear flag. But, the past 4 days have prominent tails below. The bears so far have failed to get a breakout. If today is an inside day, there will then be an iooi pattern, which is a variation of an ioi (inside-outside-inside).
That is a breakout mode pattern. If today is an inside day, it is both a buy and a sell signal bar for tomorrow. The bears want a breakout below and a measured move down based on the 100 pip height of the bear flag.
The bulls will try to get a reversal up. If today is an inside day, especially if it closes near its high, the bulls will buy above today’s high. Their 1st goal is a test of the top of the most recent sell climax. That is the June 14 big bear trend day. Its high is the neck line of the double bottom. They then want a breakout above and another test of 1.20, which is at the May 14 high.
h3 Overnight EUR/USD Forex trading/h3
The EUR/USD 5 minute Forex chart has been in a 30 pip range for the past 4 hours. Today so far is an inside day. The bulls want today to remain an inside day so that it will be a buy signal bar for tomorrow. They especially want today to close above its open and have have a big bull body. That would indicate buying pressure and increase the chances of a rally tomorrow. The bears always want the opposite. The want a bear day closing near its low, and they do not care if it remains an inside day.
After 4 days in a tight range, the odds are that today will continue to have a small range. Day traders will scalp unless there is a big breakout up or down. After yesterday being an outside day in a tight trading range, the odds favor an inside day today.
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