Trade of the Day: EUR/USD

By: Dima Chernovolov

EUR/USD continues to fall inside the 4-hour Flag chart pattern, which was previously identified by Autochartist. Autochartist rates the quality of this Flag at the 8-bar level – which is the result of the strong Initial Trend (9 bars), strong Uniformity (8 bars) and near-maximum Clarity (9 bars). EUR/USD is expected to fall further inside this Flag.

As can be seen from the daily EUR/USD chart below – the price earlier reversed down from the resistance zone lying between the key resistance 1.1360 (which has been reversing the pair from the end of November), upper daily Bollinger Band and the 38.2% Fibonacci correction of the downward price impulse from October. The proximity of this resistance zone and the clear downtrend increase the probability EUR/USD will continue to fall inside this Flag.