The EUR/USD forex market on the daily chart so far today has a high below yesterday’s high and a low above yesterday’s low. It is an inside day after an outside day, and there is now an ioi (inside-outside-inside) Breakout Mode pattern. It follows a small breakout above and below a 2-week triangle. Additionally, that followed a 4-week expanding triangle. All of it is within a 4-month trading range, and everything is a Breakout Mode pattern.
Traders know that there will eventually be a successful breakout in either direction, but they also know that reversals are more likely than breakouts when the market is sideways. Consequently, they are unwilling to hold onto positions for more than a few days. Once there are consecutive closes above or below the 4-month range, they then will hold part of their position for what they hope will be a 400-pip measured move, based on the height of the trading range.
Overnight EUR/USD Forex Trading
The 5-minute chart of the EUR/USD Forex market opened in the middle of yesterday’s range, rallied slightly, and pulled back. The rally was a test of yesterday’s sell climax high on the 5-minute chart. Once it got there, it pulled back, which usually happens when a market tests a sell climax high.
Today’s range has been small, and today so far is an inside day. Traders might be betting that today will remain an inside day. There would then be an ioi pattern on the daily chart, and swing traders would try for a trend day up or down tomorrow. So far today, day traders have been scalping for 10 to 20 pips.