EUR / USD Forex Trading Strategies: Break Mode
Friday was an outside bar for. He formed a double top pickup with Wednesday’s high.
The rally through May 19 was a nested wedge, with Friday sending a sell signal bar for the nested wedge and a double top with the February 25 high. Anytime there is a believable selling pattern and the market doesn’t go down, it will likely go up.
We are in a tight 5 day trading range so this is Breakout mode.
Friday closed above Thursday’s low, so there is a low probability that a sell pattern will occur; there may be more buyers than sellers.
So far today is a bull inside the day. There is a double dip mic in the tight 5 day trading range and if today continues to be a bullish day it will be a buy signal bar for tomorrow especially if today’s close approaches its highest. EUR / USD is in a strong uptrend from the March low, so a downward reversal is likely to be minor. There could be a sideways pullback to the 2 week low, but a downtrend is not likely this week.
EUR / USD could be tested down to the 1.20 Big Round Number as it is also around the 50% pullback and at the bottom of the corner.
The bulls want a break above the January high, which sits at the top of the 2-year trading range. Most trading range breakouts fail, so we’ll likely see sellers above or around the January high.
The tight 4 day trading range reduces the chances of a big move up or down today.
EUR / USD daily forex chart
Day-to-day EUR / USD forex trading on the chart in 5 minutes
- EUR / USD fell sharply a few hours ago, but has reversed just as sharply.
- The bulls were today barred from trading below yesterday’s low which would have triggered a daily sell signal.
- The bullish reversal was strong enough to make a downtrend today unlikely.
- Trading has been sideways for 2 hours in the upper half of the tight 5 day trading range.
- Today is likely to be a range trading day and will stay within the tight 5 day trading range.
- If today breaks Friday’s high and the high of the range, the breakout is unlikely to be significant. Therefore, today is unlikely to be a Big Taurus Day.
- Since there is likely to be a sideways rise, day traders will scalp both ways.
- The uptrend or downtrend day is unlikely, but if there is a series of strong trend bars, traders will switch to swing trading.
- Bulls today want to close near their high which would increase chances of a break above the February 25 high tomorrow.
- Bears would like today to be a 2nd consecutive bear day, but the odds are in favor of a bull day today. The bears will instead try to close today below the midpoint of the range, to continue the tight 5 day trading range and reduce the risk of a bullish breakout.
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