EUR/USD: Bulls and Bears Are Wrestling
Al Brooks | Feb 24, 2019 12:46AM ET
The EUR/USD daily Forex chart rallied for two weeks in a micro wedge bull channel to the 20-day EMA. The bears see a higher high double top bear flag. But, it is at the bottom of a 4-month trading range and 80% of trading range breakouts fail. Consequently, a selloff from here is more likely to form a double bottom with last week’s low. The trading range should continue.
Every trading range over the past couple years broke out after about a couple of months. This one has lasted four months. Traders should expect a breakout soon. But, until there is a breakout, there is no breakout. Reversals are always more likely. Traders will continue to look for reversals every few days until there are consecutive closes above or below the range.
h3 Overnight EUR/USD Forex Trading/h3The EUR/USD 5-minute Forex chart has been sideways for 3 days. Traders are deciding if there will be one more one high in the 4-day rally and then a pullback, or if the pullback is underway. Because the range is tight, day traders are scalping for 10 – 20 pips.
The most important price today is last week’s high of 1.1342. Last week is a buy signal bar for a double bottom with the November low. But, last week was a bear bar and therefore a low probability buy setup. The odds favor more sellers than buyers above last week’s high. However, if the bulls can show signs of strength, they still can get a reversal up. One sign would be a close this week above last week’s high.
The bears always want the opposite. They, therefore, are selling reversals down from above last week’s high.
So far, both the bulls and bears are scalping. This week has been oscillating above last week’s high in a small range. That will likely continue all day.
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