The market on the daily chart has been sideways for a month. This is a Breakout Mode pattern. Traders look for either a measured move up or down. Every trading range has both a buy and sell setup. The bears have a wedge top and the bulls have a higher low after a double bottom.

EUR/USD Daily Chart

Yesterday was an inside day after an outside day. That is an ioi Breakout Mode pattern and it is within the 4 week bigger Breakout Mode pattern. So far, today is a 2nd inside day. This is an ii, which is a Breakout Mode pattern. The ioi has now grown into an ioii (inside-outside-inside-inside).

When there is a Breakout Mode pattern, there is a 50% chance of a successful breakout up or down. Furthermore, there is a 50% chance that the 1st breakout up or down will fail. Until there is a clear breakout, traders bet on reversals every day or two and take quick profits.

Overnight EUR/USD Forex trading

The 5 minute chart of the EUR/USD Forex market so far today is forming a 2nd consecutive inside day. Day traders are scalping reversals for 10 pips.

Today’s range is small and the daily chart is at the apex of a Breakout Mode pattern. Day traders will continue to scalp until there is a breakout up or down. They will then swing trade.

When a market is very tight like this, there is an increased chance of a strong breakout coming at any time. While waiting, day traders scalp.

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.

Source link