EUR/USD In Breakout Mode
Al Brooks | Sep 22, 2020 09:56AM ET
The EUR/USD Forex market on the daily chart has a weak breakout below the neckline of a five-week head-and-shoulders top. The bulls want a reversal up from the bottom of the eight-week trading range and then a test of the February 2018 high.
EUR/USD is in breakout mode. There is a 50% chance of a successful breakout and measured move up or down. But until there is a breakout, there is no breakout. Traders will continue to look for reversals every week or two.
While EUR/USD is now near the bottom of the eight-week range, the bulls need a strong bull reversal bar. Traders would then look for a leg up.
There is still room to the Aug. 3 low at the bottom of the range. The lack of a reversal increases the chance that the EUR/USD will have to test that low before the bulls can regain control.
Overnight EUR/USD Forex trading
The five-minute chart of the EUR/USD Forex market broke below yesterday’s low and again below the neckline of the five-week head-and-shoulders top overnight. However, the bulls bought the breakout.
Today, so far, has been a small trading range day, like most days for several weeks. Day traders continue to look for reversals and 10 – 20 pip scalps.
The bears are hoping that today’s trading range will be a bear flag in the yesterday’s selloff. They want EUR/USD to test below the Aug. 3 low.
The bulls see the overnight low as a lower low major trend reversal on the five-minute chart.
There is no sign that the overnight range is about to breakout up or down. Therefore, day traders will continue to scalp until there is a breakout.
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