The forex market on the daily chart is stalling at the top of its month-long trading range. Every trading range is a Breakout Mode pattern, which means there is always about a 50% chance of a successful breakout in either direction. Additionally, there is always both a reasonable buy and sell setup.
The bulls hope the head and shoulders bottom will lead to a measured move up, and a breakout above the January high. The bears see a triangle, a Low 2 bear flag, or a double top bear flag, and they want a measured move down to the November low.
The 3-week rally is stalling at the top of the range. Traders are deciding if it will begin a leg down here or soon, or continue up to the next resistance at the January high. Yesterday was an unconvincing sell setup. It was a small bear day after 3 bull days. Today so far is sideways. Traders need more information, which means a better buy or sell setup, or a strong breakout up or down.
Overnight EUR/USD Forex trading
The 5-minute chart of the EUR/USD Forex market traded below yesterday’s low overnight, which triggered a minor sell signal. However, it has had several reversals, and it mostly has overlapped yesterday’s range. Day traders have been scalping the reversals. They will continue to do that today unless there are consecutive big trend bars breaking above or below yesterday’s range.
The location on the daily chart is good for a big trend day up or down, but the 2 small sideways days makes a continued trading range day more likely.
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