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Technical analysis

Range

By Jarosław Wasiński • Published: • Updated:
A price environment where a currency pair oscillates between a defined support level and a resistance level without establishing a directional trend. Range-bound strategies buy at support and sell at resistance. See Trend, support & resistance.
Example. A rule labels EUR/USD as ranging while price remains within a previously identified 1.1000–1.1050 area during its defined window. A long Ask entry at 1.1002 targeting 1.1050 Bid has 48 pips to the target. The 50-pip range width is not the same as that executable distance.

Range needs a rule

A range can be identified using extrema, limited directional movement or another specified measure. State the lookback, boundary tolerance and expiry. A short interval can range inside a larger trend. A later visible rectangle does not establish that both boundaries were already known at the first apparent entry.

Boundaries can fail

Support and resistance are candidate references rather than barriers. A price touch may rebound, cross or remain near the edge. Repeated contacts do not guarantee either increasing or decreasing strength. Define whether invalidation uses an intrabar price or a completed close; those have different information timing and potential losses.

Trading policy

Buying near the bottom and selling near the top is one possible mean-reversion rule. A breakout rule instead seeks continuation beyond the area. Neither follows automatically from the range label. Costs can consume a narrow expected movement; specify actual Bid/Ask entry, exit, size and failure handling, and include unsuccessful ranges rather than only rectangles drawn around profitable oscillations.

FAQ

Can a range exist within a larger trend?
Yes. Classification depends on the interval and measurement rule.
Is every touch of a range edge an entry?
No. A complete signal, execution and risk rule is needed.

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Jarosław Wasiński

Editor-in-chief, ForexMechanics.com • Macro & FX analyst

Independent analyst and practitioner with over 20 years of experience in financial markets. Actively involved in Forex since 2007, with a focus on fundamental analysis, OTC market structure, and disciplined capital risk management.

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