The EUR/USD daily Forex chart had a big bear bar yesterday after a bigger bull bar Friday. This is a common pattern. Traders wonder if yesterday is just a pullback from Friday’s rally or a reversal of the rally.
For the bears, it is a lower high at the EMA in a bear channel. Yesterday is therefore a Low 1 bear flag.
The bulls, however, believe there will be more buyers than sellers below yesterday’s low. They therefore expect today to become a buy signal bar for tomorrow.
After 7 sideways days, traders think that the daily chart is still in Breakout Mode. The believe that there is an equal chance of a bull or bear breakout.
Overnight EUR/USD Forex trading
The EUR/USD 5 minute Forex chart has been in a 20 pip range overnight. Furthermore, it is within yesterday’s range. It therefore did not yet go below yesterday’s low to trigger the sell signal on the daily chart. But even if it does, the odds are against a big move since the price the EUR/USD in the middle of a 7 day tight trading range.
At the moment, the day’s range has been so small that it is even difficult to make a 10 pip scalp. If today does trade below yesterday’s low, it will trigger a sell signal on the daily chart. But with so little energy overnight and for many days, there will probably be more buyers than sellers below yesterday’s low. Today will probably not go very far up or down.