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EUR/USD triangle nearing the apex…
In the most recent weekly Euro technical forecast this is what I had to say, “It may very well take the better part or all of next week before we get a resolution, so hanging tight may be the name of the game next week.”
Indeed, it’s been a ‘boring’ week so far for the Euro, but we are getting close to at least a little movement. With price where it is in proximity to the apex of the triangle we could see a breakout at any time now. Trend and general tone favor a downside break, but we can’t rule out an upside breakout.
Maybe down or maybe up, you say? That is the nature of these patterns, the contracting volatility doesn’t in of itself tell you which way the next move will be. It just tells you there is likely to be a move. Simply put, follow the break.
A downside break will have 11215 and the underside trend-line from November 2017 in focus, or worse towards 11119. The trend is down so support levels are at a greater threat to break than resistance levels. On break to the top-side resistance is rather close in several forms from the mid-11400s to the mid-11500s.
Because resistance is so close and the move would be developing against the trend, the better play here, in my view, is to wait and see if a breakout into resistance won’t stall and offer an opportunity to get short.
From a tactical standpoint, it’s been tough as of late and while this might not turn out to be a great swing-trade a breakout can help shape a directional bias for short-term maneuvers.
EUR/USD Daily Chart (Triangle, levels)
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EUR/USD 4-hr Chart (Triangle breakout nearing)
***Updates will be provided on these ideas and others in the trading/technical outlook webinars held on Tuesday and Friday. If you are looking for ideas and feedback on how to improve your overall approach to trading, join me on Thursday’s for the Becoming a Better Trader webinar series.
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX