The Emini rallied overnight, but this would be the 3rd leg ip from the October 3 high. Furthermore, the bear channel down to the October 9 low was tight. Therefore, there will probably be sellers above last week’s high.
The EUR/USD daily Forex chart has been in a trading range for 6 months. There have been many strong legs up and down, and every one of them reversed. Traders will continue to bet on reversals instead of a breakout of the 6 month range.
The current 5 day rally looks like a parabolic wedge. Therefore, the are probably sellers above the October 12 high, creating the final 3rd small leg up. If so, the bears will create a couple small legs sideways to down over the next week or two.
Less likely, this rally will continue above the September 24 high without a test down. Or, it will form a head and shoulders top where the September 24 high is the top. Then, the bears will get a break below the August low.
Overnight EUR/USD Forex trading
The EUR/USD 5 minute Forex chart rallied 60 pips overnight. It is now testing Friday’s high. But, the 5 day bull channel is tight. In addition, this is now the 3rd leg up (the 1st was October 3). Therefore, this is a parabolic wedge rally. That usually leads to a couple legs sideways to down. Consequently, despite the overnight rally, the odds favor sellers above Friday’s high and then a couple small legs down on the daily chart.
Day traders will buy pullbacks today and tomorrow. This is because a small 3rd leg up is likely early this week. But, they will begin to sell once the rally goes above Friday’s high. There will then probably be a test back down to 1.15 and the October 9 high.
Since October 9 was only a doji, it was not a strong buy signal bar. The high of a weak buy signal bar usually gets tested.