EUR/USD Forex Market Trading Strategies
The EUR/USD daily Forex chart has an inside day yesterday. So far, today is a second consecutive inside day. If it remains that way, there will be consecutive inside days, which is an ii Breakout Mode pattern.
Last week’s two big bear days formed the first pullback in ten days. The bulls typically buy that. Consequently, the odds favor a test up within two weeks. At that point, the bears might form a double top with last week’s high. This would give them a better chance of breaking below the March low.
The bulls want this selloff to be a successful test of the March low. They want a rally to begin soon, which they will see as a higher low major trend reversal.
The bears always want the opposite. They are hoping that the weekly chart will continue to make lower highs and lows. In addition, they want a strong break below the March low, hoping that it will lead to an acceleration down.
At the moment, the daily chart is neutral. When that is the case, there is a 50% chance that the 1st move up or down from the two-day selloff will reverse. Furthermore, there is a 50% chance of a bull breakout or a bear breakout from the two-day trading range.
Finally, there have been many breakout attempts over the past four-month and each has failed. As long as the chart is sideways, betting on reversals every 2-3 weeks is better than expecting a successful breakout. But, one will probably come soon once Brexit is resolved.
Overnight EUR/USD Forex trading
The EUR/USD 5 minute chart has been in a 30 pip range overnight. It is still within yesterday’s range, which was within Friday’s range. Traders might try to keep today as the second consecutive inside day. There might be Brexit news later this week, and traders might want to stay neutral ahead of it.
Because the range has been small, day traders have been scalping. Can today break strongly above or below yesterday’s range? Probably not. Consequently, there will probably be buyers around yesterday’s low and sellers around yesterday’s high.