- The Globex market formed a strong upside breakout during the CPI report released at 5:30 AM PT this morning.
- The EUR/USD formed a strong upside breakout during the report and is currently getting a second leg up.
- The U.S. Session likely has a decent size gap up. This increases the odds that the first reveal down will fail, and the bulls will get a second leg up.
- Since this gap up is late in a rally on the higher time frames, there is an increased risk that the market will reverse down. This means traders should be aware of the risk of exhaustion following this morning’s gap up. Therefore, today may have a lot of trading range price action.
- As always, traders should expect the first 6 – 12 bars to have a lot of trading range price action on the open.
- Since the gap up will likely be large, traders should be aware that the market will probably have to go sideways and get closer to the moving average.
- If bulls can get consecutive strong bull trend bars on the open, the market may form a brief bull trend from the open. However, it will likely not last all day.
EUR/USD: Second Leg Up to May High
