The is in a bullish wedge channel and yesterday triggered a weak sell signal. Yesterday it reversed and became a buy signal bar. Today triggered the buy signal by breaking past yesterday’s high. However, it has yet to break Friday’s high and therefore EUR / USD is still on the sell signal.
The sell signal was weak as a small bearish doji is usually insufficient to reverse a strong uptrend. Yesterday’s buy signal is also weak. This is because he had a big cock and a small body. It’s a big doji, which is generally more of a trading range bar than the start of an uptrend.
In the event of a weak signal, fewer traders are willing to bet on a trend. In addition, the entry is generally low. This disappoints traders who took the signal, and they tend to take quick profits. The result is usually a small trading range. Therefore, the EUR / USD is likely to go more sideways for a few days than up or down.
Day to Day EUR / USD Forex Trading
The EUR / USD Forex market 5 minute chart sold a bit overnight, but then reversed just above yesterday’s high. This triggered the buy signal on the daily chart. However, the rally barely broke yesterday’s high and then reverted back to yesterday’s close and today’s open.
While today is a bullish reversal day, it is small. In addition, the rally refused resistance. The downward reversal so far is minor, and the upward reversal has been reasonably strong. This makes it likely that the bulls will test yesterday’s high again. So they will probably buy this pullback. However, the bears were able to reverse the market right after the daily buy signal triggered. They will likely sell again around yesterday’s high.
With sellers above and buyers below, EUR / USD will likely be in a trading range today. Since the daily chart is in an uptrend and there have been upward reversals yesterday and today, if there is a trend today, the uptrend is more likely. However, overnight trading has seen several small reversals within a relatively small range. Day traders will likely be looking to scalp for the rest of the day, unless there is a strong streak of bars back and forth.