EUR/USD Forex Market Trading Strategies
Al Brooks | Jun 21, 2018 09:27AM ET
The EUR/USD daily forex chart broke below yesterday’s low. But, yesterday was a bear doji in a tight trading range, and the past 4 days had prominent tails below. This is a weak ioi bear flag. An ioi is an inside bar after an outside bar. The outside bar means that the bar before is inside of the outside bar.
The EUR/USD daily forex chart is in a strong bear trend. However, it is also in the early stages of a trading range. It is looking for the bottom of the range.
The bulls hope that this week’s low will be the bottom. But, they need a strong bull bar today or tomorrow for a buy signal bar. They would then have a High 2 bottom with Monday’s bull bar. That would be a reasonable bottom because it would be a 2nd reversal up from below the May low. In addition, the daily chart is at the support of the November 7 low.
While yesterday was a bear inside day, it was a doji bar. Therefore, it is a weak sell signal bar. Yet, if the bulls cannot create bull bars today or tomorrow, the odds favor at least slightly lower prices.
The minimum goal for the bears is a 100 point measured move down based on the height of the 4 day bear flag. They have a 40% chance of a 300 pip measured move down based on a failed double bottom attempt. There is a 60% chance of at least a 200 pip rally before the daily chart falls more than 100 pips below the May 29 low.
h3 Overnight EUR/USD Forex trading/h3
The EUR/USD 5 minute forex chart reversed up 40 pips after breaking below yesterday’s low. However, the bulls need a continuation of the rally. Without that, the rally will be a bull leg in a trading range rather than the start of a swing up.
The 240 minute chart is forming a wedge bottom over the past 5 days. Therefore, the bulls will look for a strong rally and a test of the top of the wedge today or tomorrow. That is just above 1.1700.
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