EUR/USD: Traders Continue To Bet On Reversals

Oct 16, 2020 1:54PM | Currencies

The Forex market on the daily chart sold off this week from a wedge bear flag at the September 2018 high. The selloff lacked consecutive big bear bars and therefore has not been strong.

The selloff stopped yesterday at the Sept. 30 start of the wedge. The bulls are trying to get a double bottom reversal up from that low.
This is still trading range price action, as it has been for 3 months. The chart looks bearish for a few days and then bullish. Neither side can maintain control. The result is reversals every few days. There is always both a bull and bear pattern. Until there are consecutive closes above or below the 3-month range, traders will continue to bet on reversals.Overnight EUR/USD Forex TradingThe 5 minute chart of the EUR/USD Forex market reversed up from yesterday’s low overnight. There is now a double bottom bull flag with the Sept. 30 low on the daily chart.
While the overnight rally has not been especially strong, it erased most of yesterday’s selloff. So far, day traders have only been buying. But they have not been buying aggressively since the range is relatively small.
This rally will probably convert into a trading range. Once there is a 20 to 30-pip pullback, the bears will begin to sell rallies for scalps. Until then, day traders will only buy. But, since today is already about the size of an average day and the rally has not been very strong, there might not be much left to the rally.

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