The 15 minute EURUSD Forex chart is within a 40 pip tight trading range. Day traders will scalp until there is a strong breakout up or down. Many scalpers will use limit orders and scale in.
The EURUSD daily chart has been in a tight trading range for the 3 weeks since its sell climax. There is no evidence that this will change. All trading ranges ultimately break out. The bears have the momentum of the strong breakout last month. However, as each new day gets added to the 3 week trading range, that breakout drifts further to the left. At some point, it loses all influence over the current price action.
The bulls have the advantage of the chart being at the bottom of a 6 month trading range. When a market is near the bottom of a trading range, there is an 80% chance that it will continue sideways or start to go up.
80% Rule
This is the result of my 80% rule. Markets have inertia. Consequently, they tend to continue to do what they’ve been doing. They resist change. Hence, there is an 80% chance that trading range breakout attempts fail. Furthermore, there is an 80% chance that trend reversals in a strong trend will fail.
The European Forex session
The EURUSD Forex chart has been in a 40 pip range overnight. Given that it has been in a very tight trading range for several weeks, this is what traders expected. It increases the chances of a tight trading range today. Yet, traders are always ready for a breakout, even when it is unlikely.