The EUR/USD has had 7 consecutive sideways dojis on the daily chart after breaking above the March 17 high. The bottom of the tight trading range has been held above that high, which means that the space between the tight trading range might be a measuring gap. The October 15 lower high just above at around 1.1500 is resistance. If the bulls an get above that, the next resistance is the August 24 high just above 1.1700. That is the top of the yearlong trading range. As long as they bulls keep the gap open on the daily chart, the odds favor at least one more leg up.
The bulls want a breakout above and then a total reversal of the 2014 bear breakout on the weekly and monthly charts. The bears prefer no bull breakout. If there is a bull breakout, the odds still favor a failed breakout and a reversal back down. The EUR/USD is in the process of deciding whether the rally from the December 3 low is the start of a bull trend on the weekly and monthly charts, or simply a buy vacuum test of the top of a bear flag. The odds still favor the bears on the weekly and monthly charts. The bulls need a strong breakout above the August 24 lower high and strong follow-through buying before they will convince traders that they have taken control.
The 5 minute chart reversed up over the past hour from a higher low in the 7-day tight trading range. However, trading ranges have many strong moves up and down. Eighty per cent of them fail to lead to a breakout (my 80% rule), so the odds are against this one being more than another leg in a trading range.
However, because of the gap up on the daily chart, the odds still favor at least one more leg up. One of these bull breakout attempts will probably succeed. Until one does, bulls will still be quick to take profits and bears will sell the rips (strong rallies), since both know that strong legs within a trading range usually reverse. Traders buy low, sell high, and scalp for 10 – 20 pips, and they will continue to do that until there is a breakout.