Trade of the Day: EUR/USD

By: Dima Chernovolov

EUR/USD continues to fall inside the hourly Down Channel chart pattern which was recently identified by Autochartist. Autochartist measures the quality of this Down Channel at the 4-bar level – which is the result of the slow Initial Trend (1 bar), above-average Uniformity (6 bars) and significant Clarity (7 bars). EUR/USD expected to fall further inside this Down Channel – in line with the earlier breakout of the key support level shown below.

As can be seen from the daily EUR/USD chart below – the pair previously broke through the pivotal support level 1.0880 (which stopped the sharp downward impulse in October, as can be seen below). This price level is acting as strong resistance after it was broken. The proximity of this resistance level and the strength of the active downward impulse wave from December increase the probability EUR/USD will continue to fall inside this Down Channel.