EUR/USD Technical Analysis: Triangle Setup Carries Bearish Cues
EUR/USD Technical Strategy: Flat
- Euro carving out bearish Triangle chart pattern above 1.13 figure
- Break lower to expose November low, heavy resistance below 1.15
- Waiting for daily close breakout confirmation for EUR/USD trade
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The Euro looks to have carved out a Triangle consolidation pattern above the 1.13 figure against the US Dollar. The congestive setup is typically followed by continuation of the dominant trend preceding it, which carries bearish implications in this scenario.
From here, a daily close below Triangle floor support at 1.1321 broadly opens the door for a decline to test the November 12 swing bottom at 1.1216. Alternatively, a push above the pattern’s upper boundary at 1.1434 targets congestion area resistance in the 1.1456-81 zone.
While positioning suggests that the long term bearish EUR/USD trend may soon resume, confirmation is absent. Furthermore, the inherently narrowing Triangle structure makes for progressively diminishing risk/reward appeal. With that in mind, waiting for a confirmed breakout to take a trade seems prudent.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
To contact Ilya, use the comments section below or @IlyaSpivak on Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.