Daily Forex Update: EUR/USD
By: Dima Chernovolov
EUR/USD continues to fall after the recent breakout of the Pennant chart pattern which was earlier identified by Autochartist on the daily charts. Autochartist rates the Quality of this Pennant at the 8 bar level – which is the result of the sharp Initial Trend (10 bars), above-average Uniformity (6 bars) and significant Clarity (8 bars). High Initial Trend reflects the sharpness of the previous downward price impulse, which serves as the “flag-pole” of this Pennant. EUR/USD is expected to fall to the forecast price 1.0509.
As can be seen from the daily EUR/USD chart, the top of this Pennant formed when the pair reversed down from the strong resistance zone lying between the key resistance level 1.0800 (which also reversed the previous correction in December), 50% Fibonacci correction of the downward impulse from November and the upper daily Bollinger Band. The proximity of this resistance zone increases the probability EUR/USD will continue to fall toward the forecast price 1.0509 tomorrow.
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