EUR/USD: Traders Continue To Look For Reversals
Al Brooks | Jun 02, 2021 10:40AM ET
On the EUR/USD chart:
– Three-week tight trading range nested within a three-month trading range, which is nested within five-year trading range. Traders continue to look for reversals on daily, weekly and monthly charts.
– Yesterday was sell signal bar for lower high reversal, but the pattern from the May 25 high was small and, therefore, traders expect only a minor reversal.
– Today triggered the lower high sell signal, but it is a reversal within a three-week trading range, and it is more likely to last only one to three days.
– The bears want a reversal down from a wedge rally to a double top on the daily chart, but the EURUSD continues to reverse every few days.
– Traders will continue to look for reversals until there are at least a couple consecutive trend bars in either direction, and a breakout of the three-week tight trading range.
h2 Overnight EUR/USD Trading On 5-Minute Chart/h2– Sold off in a strong bear trend overnight. By going below yesterday’s low, today triggered a sell signal on the daily chart.
– Once the selloff got to the bottom half of the three-week range, it reversed up about an hour ago.
– The reversal up has been about 25 pips. That is enough for traders to expect the overnight bear trend to convert into a trading range. The odds are now against much lower prices today.
– Big down, big up creates big confusion. That typically leads to a trading range.
– Day traders will switch to selling rallies, and scalping from selling at the market and swing trading.
– They will also now buy dips for scalps.
– Trading range likely for at least a couple hours.
– The fight will be over the mid-point of the day’s range and the open of the week. It will probably be about the middle of the developing trading range.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.