EUR/USD (daily chart) has consolidated within a tight range pattern that resembles a pennant formation. The trading week so far has been characterized by market indecision and significantly low volatility in this currency pair, as can be noted by the recent succession of daily doji and spinning top candle patterns.
The current pennant, which can be considered a potential bullish continuation pattern as it has surfaced within a strong bullish trend, occurs after price broke out above 1.3300 two weeks ago and then went on to establish a 10-month high right around 1.3400. Since then, price has fluctuated around the 1.3300 region and progressively tightened its consolidation.
In the event that the pennant pattern succeeds as a trend continuation formation with a breakout to the upside, price could move towards further potential resistance around 1.3500 and then 1.3700. If the pennant fails with a break of the consolidation to the downside, price could make yet another correction towards key potential support around 1.3000.
James Chen, CMT
Chief Technical Strategist
FX Solutions
Forex trading involves a substantial risk of loss and is not suitable for all investors. FX Solutions LLC (“FXS”) is compensated through a portion of the bid/ask spread. This information is being provided only for general market commentary (based on technical analysis) and does not constitute investment trading advice. Certain information contained herein has been obtained from sources that FXS believes to be reliable; however, FXS cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed. The information contained herein is subject to change without notice. FXS has no obligation to update any or all of such information; nor do we make any express or implied warranties or representations as to the completeness or accuracy or accept responsibility for errors. These materials are not intended as an offer or solicitation with respect to the purchase or sale of any financial instrument and should not be used as the basis for any investment decision. Past performance is not necessarily indicative of future results. No determination has been made regarding the appropriateness of any information contained herein. Due to various risks and uncertainties, actual events or results may differ materially from those reflected or contemplated herein. FXS expressly disclaims any loss or profits that may arise from any use of the information contained in or derived from this commentary. FXS and its affiliates may engage in transactions that are inconsistent with the views expressed herein. FXS does not endorse nor is it responsible for any third-party posts related to this material.
Share
