EUR/USD Triangle Very Near Breakout; ECB the Catalyst?
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EUR/USD triangle ready to break, ECB to do it?
The narrowing range (triangle) was a focus last week, thinking it would have broken by now. But so far we remain awaiting a resolution. Today’s ECB meeting could be the catalyst, or not. The last grain of sand may indeed be something else or nothing at all, just more selling than buying or vice versa.
At any rate, the developed triangle is running out of real estate. A top-side break is at risk of failing, with trend/tone working against it along with resistance levels immediately following any breakout which might develop.
A downside break has the trend/tone in its favor. And while there is support nearby via the November low at 11216 and the underside trend-line from November of last year, those levels are further from the apex than resistance is, and given the trend those levels are at greater risk of breaking than top-side levels are.
Triangles, like all chart patterns, need to be validated before full-risk should be put on. A top-side break isn’t that appealing while a downside break is, simply for the reasons mentioned above. While I personally don’t like the idea of buying a bullish break, at the very least it will keep from having on short exposure.
EUR/USD Daily Chart (Triangle and levels)
EUR/USD 4-hr Chart (Triangle near apex)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.