EUR/USD: Market Remains Neutral

The EUR/USD Forex market on the daily chart has been in a trading range for 3 months. After breaking below the range, it reversed back up to the middle of the range and the September 2018 high.

EUR/USD Daily

The bulls hope that the reversal up will continue to above the September high. The 3-week rally is a Small Pullback Bull Trend. But it is also a wedge, and the EUR/USD might be forming a lower high in a bear channel that began with the September high.

When a market is in a trading range, it is neutral. The bulls and bears alternate control every few days, but the probability of a bull or breakout stays around 50%. That is the case now.

As long as the EUR/USD stays below the Sept. 19 lower high, it is slightly more bearish. If the bears get a break below the September low, the chart will become more bearish. If the bulls get a break above the September 1 high, the chart will again be bullish.

Overnight EUR/USD Forex Trading

The 5-minute chart of the EUR/USD Forex market traded below yesterday’s low. That triggered a sell signal on the daily chart for a wedge bear flag. But yesterday was a doji bar, which is a weak sell signal bar. Also, the 3-week rally has been in a tight bull channel (a Small Pullback Bull Trend). That is bad context for traders hoping for a resumption of the bear trend. Therefore, the EURUSD bounced up from below yesterday’s low.

There were about as many buyers below the sell signal bar as they were sellers. The EUR/USD has been mostly sideways overnight. Day traders have been looking for 10-pip scalps up and down.

The bears want the day to close far below yesterday’s low to compensate for the weak sell signal bar on the daily chart. At the moment, that is unlikely.

The bulls want a strong reversal up to above last week’s high. But the bars and legs have been small overnight, and that, too, is unlikely. Day traders will continue to scalp, unless there are 2 or 3 consecutive big trend bars up or down.

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