EURUSD Technical Highlights:
- Euro’s quiet price action on verge of changing
- Descending wedge nearing completion
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Euro’s quiet price action on verge of changing
The Euro has been a difficult pair to get a handle on much of the time in the past few months, with only intermittent periods of clarity to guide traders. A clear price pattern looks to be nearing completion as quiet price action becomes increasingly quiet, forging out a descending wedge pattern.
Trend (down) and the features of descending wedges (lower-highs and a flat bottom) suggest a downside breakout is the most probable outcome, however; a bullish breakout still can’t be ruled out. With that in mind, traders will likely be best served by waiting for a confirmed break before taking a stance.
The size of the wedge suggests a 150-200 point move from the point of breaking out. This could mean a break beneath underside trend-lines dating back to November 2017 (the 2015 line resides above the breakout point).
A break below all downward sloping support lines arrives around 11000, which if breached could finally lead to a move to one of the big-picture targets – the April 2017 French election gap-fill of 10724. A break to the top-side will quickly have trend-lines from last year in play, and if broken may see the 11324 April swing-high up to the 200-day achieved.
In either event, don’t look for the Euro to continue to quiet down for much longer. Something has to give here and while it may again only lead to a multi-day push in either direction, it could offer traders another trade-able swing worth taking risk on.
EURUSD Daily Chart (Descending wedge nearing completion)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX