[EURGBP] Bullish Mean Reversion Opportunity Via Inside Day Breakout

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eg mean reversion

Today I would like to talk about a potential mean reversion situation on the EURGBP daily chart.

Price has accelerated away from it’s mean creating the classic price-to-mean gap. The fast moving bearish price action was contained by a support level – where price has stalled and churned to create a bullish body inside day.

If price breaks out higher in the London session – we could see a fast return back to the mean, and possibly even back to the major resistance above. But, to make that call, we will need to wait and see how price reacts if it does indeed sling shots back to the 10/20 EMA mean value area.

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The Forex Guy is an educational Forex trading blog run by Dale Woods who has been a passionate retail Forex trader for over 6 years. Dale trades the Forex market exclusively with price action based methodologies, believing price action trading to be one of the powerful approaches used the market today, and really is the core foundation of any good trading system. Dale also strongly believes in keeping charts clean and keeping things simple, logical and uncomplicated. By making trading decisions straight off the raw price action data, you can ‘bypass’ unnecessary variables like exotic indicators, trading robots or magical pivot levels. Dale enforces the idea that there is hardly any edge trading news and economic data releases and much prefers to make trading decisions straight from the candlestick themselves. ‘The Forex Guy’ is dedicated to providing knowledge to serious and passionate traders who want to learn the art of price action trading, positive geared money management and how to psychologically condition themselves to become a professional trader.

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