EUR/USD Strategies

By Al Brooks

Nothing has changed in the EUR/USD. It is in a tight trading range on the daily chart at the apex of a 7-week trading range. This is breakout mode, and until there is a breakout, day traders will scalp. The December 3 reversal was strong enough so that the odds of a 2nd leg up are still greater than the odds of a break below the December low. Traders on the 60-minute chart are scalping for 50 pips. Traders using the 5-minute chart have been mostly scalping for 10 – 20 pips. However, there was a bigger swing down over the past 5 hours. It dropped back to the middle of the range of the past several days and it is more likely to go sideways once again. The swing down overnight lacked consecutive big bear trend bars. Many bars overlapped and had small bodies and prominent tails. This is trading range price action, and it makes the selloff more likely just another leg in the trading range rather than the start of a move with much more to go.