Euro Technical Outlook:
- EURUSD on the cusp of triggering falling wedge pattern
- Could change the trend for the foreseeable future, but…
- Resistance is resistance until broken and sustained
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EURUSD on the cusp of triggering falling wedge pattern
Last week, the Euro stopped its decline around support just under 11200 and swung higher to press up against the top-side of a falling wedge that has been building since August. The breakout of the wedge could result in a powerful move as pent up pressure in a low-volatility environment is due to be released.
But resistance is resistance until proven otherwise, and even if the confluence of the June 7 high at 11348, the January trend-line, and the 200-day just a few pips higher is broken, we will want to see how the rally holds. There have been numerous attempts to trade higher in recent months, but each of them has ended in speedy reversals back lower.
With that in mind, if the next week can bring a closing weekly candlestick above the top-side t-line of the wedge, it would add conviction to a bullish outlook. Tactically, this means fresh longs may be best kept on the back-burner for now. Would-be shorts could look to lean on resistance levels close by as a line-in-the-sand.
Check out the IG Client Sentiment page to find out how changes in positioning in major markets could signal the next price move.
EURUSD Weekly Chart (Falling wedge)
EURUSD Daily Chart (Confluence of resistance)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
