EUR/USD Awaiting Unemployment Report Before Breakout?
Al Brooks | Jun 30, 2020 10:34AM ET
The EUR/USD Forex market on the daily chart has been sideways for 4 weeks after a strong rally. It is in a tight trading range, which is a Breakout Mode Pattern. That tight trading range currently is also a triangle.
Traders believe that until there is a successful breakout, both the bulls and bears have about a 50% chance of success. The probabilities change every day, but cannot get far from 50%. If they did, the market would not be still going sideways. Today is slightly more bearish because the bulls failed to get a strong reversal up yesterday.
Traders look for a measured move up or down based on the height of the range. The bears want a test of the May 1 high and the bulls want a move above the March high. It is important to remember that the 1st breakout fails 50% of the time.
The EUR/USD might be waiting for Thursday’s unemployment report before breaking out. In the meantime, traders are holding trades for only a day or two.
h3 Overnight EUR/USD Forex trading/h3The 5 minute chart of the EUR/USD Forex market traded below yesterday’s low but reversed up from above last week’s low. Last week was an inside bar on the weekly chart. So far, this week is a 2nd consecutive inside bar.
The daily ranges have been small. Day traders have been scalping for 10 – 20 pips as they wait for a strong trend up or down.
A strong trend can begin at any time. But until there is a breakout, there is no breakout. Day traders will continue to scalp until there is a series of consecutive big bars up or down. That would be a sign that the breakout might be beginning.
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