EUR/USD Trading Strategies: 11_15_19
Al Brooks | Nov 15, 2019 11:27AM ET
The EUR/USD daily Forex chart had a wedge bottom on October 1. That typically leads to a 2 legged rally. The start of the 2nd leg up is often the right shoulder of a head and shoulders bottom. That is a type of a higher low major trend reversal. Major reversal setups have a 40% chance of a trend up. The bulls are hoping that this will happen here.
More often, either the trading range continues or the bear trend resumes. However, the bulls bought every new low for 2 years. Therefore, even if the bears get their new low, it will probably reverse up and create another 1 – 2 month bear rally in the 2 year bear channel.
h3 Overnight EUR/USD Trading/h3Yesterday was a buy signal day for a higher low major trend reversal on the daily chart. Today broke above yesterday’s high and triggered the buy signal.
But instead of racing up and beginning a bull trend, the 5 minute chart so far only has had a 30 pip range overnight. This is because the 2 week bear channel has been tight. Many bulls are waiting to buy. They want to see either a micro double bottom over the next few days or a strong breakout above the 2 week bear channel.
However, there is plenty of time left in the day. The weak overnight rally could become strong if enough traders begin to think that a 2nd leg up is starting on the daily chart.
Can today be a bear trend day? Probably not. Today is reversing up from a 5 day micro wedge at support on the daily chart. Additionally, it is near the bottom of the 4 month trading range. Finally, yesterday was a bull trend reversal day. This combination makes a bear trend day unlikely today.
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