EUR/USD: Higher Low More Likely

EUR/USD market trading strategies

As expected, there were sellers above Thursday’s high, after 3 bear days. The bears hope that the reversal down from a double top with the July 30 high will lead to a resumption of the bear trend. EUR/USD has been getting a second leg down for several days after the Sept. 3 parabolic wedge top. There is almost a 60% chance that this 7-day reversal down is minor, but it might reach the Aug. 27 buy climax low before the bulls return.

Bulls want a higher low major trend reversal to form over the next couple weeks. That would also be the right shoulder in a head and shoulders bottom. They then want a breakout above the July 30/Sept. 3 double top and a measured move up. Bears want the July 30/Sept. 3 double top to lead to a break below the Aug. 20 neckline, and then below the Nov. 4, 2020 bottom of the yearlong range.

Since the bull channel to the Sept 3 high was tight, the bears will need a couple of consecutive bear days to convince traders that the bear trend is resuming. EUR/USD has been trading sideways for 3 months with no evidence that this is about to change, with reversals occurring every week or two. So there is only 40% chance of either a strong breakout above the Sept. 3 high or below the Aug. 20 low over the next several weeks.

EUR/USD forex daily chart

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

(Visited 6 times, 1 visits today)