Markets have been slow and choppy for some time, now, and with U. S. equity market closed and liquidity low, we think that EUR/USD will not break out of its range any time soon. But when it does, it will probably be to the upside, considering the pair went bullish this summer.

On the chart below we see that the pair found support a few sessions back around 1.2880, at the trend-line connected from the 1.2800 swing from late September. Notice that today’s rise is quite sharp on the intra-day basis, which has also extended through the falling channel line. We think that’s important because, if or when the price closes above resistance, the trend will turn into a temporary bullish mode.

Why temporary!? Because we are tracking a triangle and in cases like this, any rally up to 1.3100 represents wave D), still only the fourth leg of a triangle pattern. But we need five of them, so our focus should be on wave E) low once it gets underway. However, there's still plenty of time until then so we must be patient and wait on more price data before we consider opportunities to the upside.