The pound was strong overnight, and the euro was weak. Although the 5-minute chart of the EUR/GBP is forming a double bottom, the selloff was strong enough to make follow-through selling likely after any pullback. Swing traders will look for at least 50 pips down.
The GBP/USD is barely breaking above the July trading range, and the rally on the 5-minute and 60-minute charts is strong enough to make higher prices likely. The bears are trying to form a double top on the 5-minute chart, hoping for a failed breakout of the trading range, but the best they probably will get is a bull flag on the 15-minute chart. Those trading Forex markets for a living expect at least some follow-through buying.
The EUR/JPY is in a spike and channel bear trend and although the bear channel has had 3 pushes down in a wedge, there is no sign of a reversal. The bear trend is still strong, but this is a sell climax. Traders learning how to trade the markets should be ready for an attempt at a bottom today or tomorrow. Because the selling is so strong, the best the bulls might get for the 1st few hours is a trading range. They then would try to create a major trend reversal within that range. Until there is a bottom, it is better to sell rallies.
Bulls see this selloff as a pullback from the rally of the end of July to test of the top of the July trading range. Bears see it as the start on a swing down from the top of the larger trading range that began in April.
The 240-minute chart of the EUR/CAD is overbought and in a channel. The bears are hoping that last night’s selling is the start of a bear breakout below the channel. If they are successful, downside targets are prior higher lows, especially the early August higher low around 1.4300, which is about 140 pips below. The 5 minute chart is having a strong bear breakout over the past 15 minutes and it is likely to lead to a swing down. Traders learning how to trade the markets should look to sell.