The daily chart of the EUR/USD Forex market is in the middle of a 6 month expanding triangle. There have been several recent abrupt reversals up and down. The bears hope that this rally is simply a pullback from the March breakout to a new low.
But last week’s rally was so strong, many bulls will buy this week’s selloff. It is more likely that the selloff will form a higher low within the next few days and then test the March 16 high again.
Overnight EUR/USD Forex trading
The 5 minute chart of the EUR/USD Forex market has traded down in a Spike and Channel Bear Trend overnight. That pattern usually has a bull break above the bear channel and then a rally up to the start of the channel. That target is the lower high at 1.0940. Then, the chart typically evolves into a trading range.
Consequently, even though the bulls have not been buying, they are looking to buy. Day traders will continue to sell rallies, but they will soon only scalp. Since the target for the bulls is only about 40 pips above the current price, when they buy, they, too, will be scalping. Unless the bars become much bigger, day traders will look for quick profits up and down today.