Forex Analysis: EUR/USD Flag Consolidation at Key Resistance



EUR/USD Daily Chart

EUR/USD (daily chart) has again bumped up against important resistance around the key 1.3300 price region, a level that price has been unable to breakout above for the last 9 months. For 2 weeks since late December, price has consolidated right under this 1.3300 level, forming a flag-like pattern consolidation. This occurs within the context of both a longer-term bullish trend extending back to the July 1.2041 low, as well as a shorter-term bullish run that began three weeks ago and broke out above several key resistance levels. With price having formed the bull flag pattern under 1.3300, a breakout above this level could move towards further potential resistance to the upside around 1.3500, thereby confirming a continuation of the entrenched bullish trend. To the downside, short-term potential support resides around the 1.3170 price region, a prior support/resistance level as well as the approximate lower border of the flag pattern.

James Chen, CMT
Chief Technical Strategist
FX Solutions

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About

James Chen is Chief Technical Strategist for City Index Group. He is also a Chartered Market Technician. He is the author of the books: "Essentials of Foreign Exchange Trading" (John Wiley & Sons, 2009) and "Essentials of Technical Analysis for Financial Markets" (John Wiley & Sons, 2010). Mr. Chen writes currency analysis, leads forex trading seminars and has appeared in numerous major financial media outlets, including CNBC, Bloomberg TV, Forbes, Reuters, Dow Jones, and the Associated Press.

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