Emini and Forex Trading Update:
Thursday June 18, 2020
I will update again at the end of the day.
Pre-Open market analysis
Yesterday was an inside day after a strong 2 day rally. It is therefore both a buy and sell signal bar for today. Since it had a bear body, it is a weak buy signal bar. There might be more sellers than buyers above.
Also, the rally was strong enough to make at least a small 2nd leg up likely. Therefore, there might be more buyers than sellers below.
The bulls want the 2 day rally to continue up to the gap above the February 24 high. That is a gap on both the daily and weekly charts. However, the selloff in February and March was exceptionally strong. Traders expect a 2nd leg sideways to down before there is a new all-time high.
There are now 2 sideways days in the middle of the June gap down. Also, there are reasons to go up and to go down. That increases the chance of another sideways day today. However, the 2 day rally was strong enough to make it slightly more likely that the Emini will go higher within a few days.
Overnight Emini Globex trading
The Emini is down 11 points in the Globex session. Yesterday was a bear day that closed near its low. It is a sell signal bar on the daily chart. Traders are wondering if the 2 day rally is going to form a lower high on the daily chart.
Today will probably have to test below yesterday’s low and trigger the sell signal. There is an increased chance of a big bear day because of the lower high on the daily chart. However, it is more likely that there will be buyers below yesterday’s low and that today will again be sideways. If the bulls can get today to close near its high, today will be a buy signal bar for tomorrow.
There is no strong need for a big day up or down today. This is especially true after 3 sideways weeks and 2 sideways days. Traders expect another day with at least one leg up and one leg day. It could be another trading range day. But, since today will probably trade below yesterday’s low, there is an increased chance of a bull reversal day if today trades below yesterday’s low.
EURUSD Forex market trading strategies
The EURUSD Forex market on the daily chart has been sideways for 3 weeks after a strong rally. There is now a small head and shoulders top. Every head and shoulders top is also a double bottom bull flag and a trading range. The bears want a measured move down. That would test the breakout above the April/May trading range at around 1.10. At a minimum, they expect a test of the June 3 low. That is the bottom of the final 2 bar buy climax in the strong rally.
The bulls see 2 legs down over the past 2 weeks. This is therefore a High 2 bull flag. But there are 3 bear bars and a magnet below. Consequently, the EURUSD will probably go at least a little lower before again trying to break above the March high.
Overnight EURUSD Forex trading
The 5 minute chart of the EURUSD Forex market has been sideways overnight within yesterday’s range. If the bulls can get the day to close near its high, today will be a credible buy signal bar for tomorrow. The bears however, expect a test of the June 3 low at a minimum. That would be more likely if today had a bear body. This is especially true if the bear body closed on the low.
With today’s small range within a 3 week range, day traders have been scalping. The odds are against a big move up or down.
Tomorrow is more important because it is Friday. It therefore affects the appearance of the weekly chart. The bears want the week to close below last week’s low.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
End of day summary
The Emini gapped below yesterday’s low, which triggered a minor sell signal on the daily chart. It quickly rallied back above yesterday’s low and entered a trading range. It straddled yesterday’s low and the 60 minute EMA all day.
Because today had a bull body on the daily chart, it is a High 1 bull flag buy signal bar for tomorrow. The bulls want the rally on Monday and Tuesday to resume. They are hoping for a test into the gap above the February 24 high.
Tomorrow is Friday so weekly support and resistance can be important. If the bulls can get the week to close near the high, this week will be a good High 1 buy signal bar on the weekly chart. That would make at least slightly higher prices likely next week.
See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.
Traders can see the end of the day bar-by-bar price action report by signing up for free at BrooksPriceAction.com. I talk about the detailed S&P Emini futures price action real-time throughout the day in the BrooksPriceAction.com trading room. We offer a 2 day free trial.
Charts use Pacific Standard Time
When I mention time, it is USA Pacific Standard Time (the Emini day session opens at 6:30 am PST, and closes at 1:15 pm PST). You can read background information on the intraday market reports on the Market Update page.