EUR/USD Forex Parabolic Wedge Rally Above July 9 High

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EUR/USD Forex Parabolic Wedge Rally Above July 9 High

EUR/USD Chart

The EUR/USD daily Forex chart achieved the initial goal of the bulls by breaking above the July 9 high. Since the rally is a parabolic wedge, a 2 legged pullback is likely over the next week.

The EUR/USD daily chart had a parabolic wedge rally to above resistance. Therefore, the odds favor a pullback for the next week. However, the bears might need a micro double top over the next few days before they get their 200 – 300 pip pullback.

Since a pullback is likely, day traders will sell rallies. Because the daily chart is in a bull trend, they will buy selloffs. Finally, the daily chart is still in a trading range and the month-long rally has probably ended. Therefore the odds favor smaller days and more trading range trading over the next week. As a result, most day trades will be 10 – 30 pips. The market is also likely to get quiet ahead of Wednesday’s FOMC announcement.

Overnight EUR/USD Forex trading

The EUR/USD daily Forex chart achieved its major goal of rallying above the July 9 high. There was a spike down on June 14 and then a pullback to the July 9 high. This led to a parabolic channel down to August 15. Typically, there is a rally back to the top of the channel, which is the July 9 high. Then, the chart enters a trading range. So far, this is unfolding in the usual way.

Because the September rally has 3 legs in a tight channel, it is a parabolic wedge buy climax. The odds favor a couple legs down that will retrace 50 – 100% of the rally from September 10.

Since the daily chart is now in a bull trend, the rally will likely continue above the June 14 high at the top of the trading range. However, it might stay in the range for a month or more before the successful breakout.

There is a 30% chance that the bears will get a double top with the July 9 high and then a break below the August 15 neck line.

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