Today, at 2pm New York time the FOMC minutes will be released. Traders will be analyzing the minutes for clues as to if the FOMC is still planning on raising interest rates a final time this year. Additionally, the Euro Economic Summit is also meeting to discuss a range of issues including the Brexit. This may generate volatility if announcements are made. Currently, there are six markets that are range bound on the 360 minute chart. Range bound markets are typically harder to trade, depending on the upper and lower limits of the range.
The plus signs on the 360 minute chart indicate the potential range for each of the markets. The cross identifies the ATR on three timeframes: white is the 360 minute ATR, blue is the 720 minute ATR and the red is the daily ATR. In this example, price is testing the red ATR (daily) but the two lower timeframes (720 and 360) are supporting price. Additionally, on some of the charts, the Stochastics is indicating that the market is not in a particular cycle because the Stochastics is not going to 80 then back down to 20.
Trading Range Bound Markets
There are several different ways to trade a potential range bound. The trader may want to sell at the upper range or buy at the lower range. Or a trader may opt to wait for a breakout of the range and then a retest for either support or resistance confirmed by a candlestick reversal pattern before entering in either direction. Or the trader may opt to trade in the direction of the higher timeframe. For example, if the daily ATR is below price, then the trader would opt for a long with the belief that the daily ATR will support price and push it upwards.