EUR/USD Forex Market Trading Strategies: Strong Bear Trend In Play
Al Brooks | Apr 05, 2021 10:06AM ET
We've got a strong bear trend in play for EUR/USD.
Today triggered a Low 1 bear flag sell signal by going below Friday’s low. The Target below is the Nov. 4 low, which would be the start of the final leg up of the wedge top on the weekly chart. There's also the possibility of a wedge bottom, so that might transform into a 2-week short covering rally.
Bulls hope today will be a small higher low and the start of a rally. Bulls are targeting the Mar. 9 low, which is the most recent breakout point, and then the Mar. 9 high, which is the start of the most recent sell climax.
- Fell below yesterday’s low, which triggered a Low 1 sell signal on the daily chart.
- Reversed up strongly from Expanding Triangle bottom.
- Rally has been strong enough for traders to expect at least a small 2nd leg sideways to up.
- Bulls want the bull trend to last all day. They would like today to break above Friday’s high, and become an outside up day. They also want today to close on the high.
- Day traders have only been buying the past couple of hours.
- They will continue to only buy until there is at least a 20-pip selloff.
- If there is a 20-pip selloff, a trading range will be more likely than a bear trend.
- Bulls will buy pullbacks, and then bears will sell reversals down from new highs for scalps.
- Since this is the possible start of a 2-week rally, some bulls will look to hold part of their position for a leg up on the daily chart.
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