The EUR/USD daily Forex chart has been sideways for 3 months. It has formed a triangle over the past month.
The EUR/USD daily Forex chart is in a month-long triangle in the middle of a 3 month trading range. Hence, it is in Breakout Mode. The 1st attempt of a breakout of a triangle fails 50% of the time. In general, the successful breakout has a 50% chance of being up or down. Since the weekly chart is in a bull trend, the probability for the bulls is about 55%.
Whenever a market is in Breakout Mode, it always looks like its about to break out. However, in a couple days, it looks like it will break out in the opposite direction. There is no breakout until there is a breakout. Most traders scalp until there is a clear breakout. They then switch to swing trading and look for a measured move.
Since the triangle and trading range are 300 pips tall, traders are expecting a 300 pip move up or down. Furthermore, since the market is now at the apex, the breakout could begin within a week or two.
Since trading ranges resist change, it is always more likely for the range to continue to grow. This means that is it more likely that the triangle will simply evolve into another pattern within the range. Yet, the triangle increases the odds of a breakout soon.
The EUR/USD 5 minute Forex chart has been in a 40 pip range overnight. Since it is at the apex of a triangle on the daily chart, there is an increased chance of a breakout up or down. Yet, until there is a clear, strong breakout, Forex day traders will continue to scalp.
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