- The EUR/USD has been in a 10-bar tight trading range on the daily chart. This is a triangle on a smaller time frame. This is a breakout mode situation, and the probability is close to 50% for the breakout up or down.
- Bears want a second leg down from the April 21 selloff.
- Bulls see the 10-bar tight trading range as a final flag and want an upside breakout that would test the April 25 high and the bottom of the March—April trading range.
- The Market is deciding if the April 21 bear breakout will lead to a measuring gap or exhaustion gap.
- The odds favor an exhaustion gap and the market ultimately testing the April 21 high. However, the market may get a small second leg down first. If the market does get a second leg down, the 10-bar tight trading range would be a final flag.
- Overall, the market will probably break to the upside soon and reach the March—April lows. The lower probability outcome would be the April 25 bear breakout leading to a measuring gap and testing the 2017 low.
EUR/USD: Tight Trading Range
