The EURUSD is stuck in a tight range on the daily chart. Previous to being stuck in this range, price had been moving higher with a lot of momentum. Price is now stalling and both buyers and sellers are fighting to gain the upper hand.
Price trading inside this tight range could present price action traders with a great chance to trade a break out setup. Because the trend has been higher previous to this range, a break out to the upside would be favored. If price can break out higher up and through the resistance area we could see the next leg of the up-trend. If price insteads falls lower there is a lot of support price will have to work it’s way through.
Until price breaks out either higher or lower from the range it will be a flip of the coin as to where price goes. The high probability setup is to wait until price has shown it’s hand and clearly broken out. Traders could wait for a break out and then look to enter a trade on any move back to the old break out support or resistance area.
EURUSD DAILY CHART – SUNDAY 20 JAN 2013
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