By: Dima Chernovolov
EUR/USD continues to fall inside the Falling Wedge chart pattern which was previously identified by Autochartist on the 30-minute charts. Autochartist rates the Quality of this Falling Wedge at the 6 bar level – which is the result of the slow Initial Trend (2 bars) and substantial Uniformity and Clarity (both rated at the 8 bar level). EUR/USD is expected to continue to fall inside this Falling Wedge – which is also indicated by the technical analysis show below.
As can be seen from the daily EUR/USD chart below, this Falling Wedge follows the earlier downward reversal from the resistance zone located between the key resistance level 1.0870 (which reversed the previous sharp upward correction in December), upper daily Bollinger Band and the 50% Fibonacci correction of the strong downward impulse from November. The downward reversal from this resistance zone created the daily Japanese candlestick reversal pattern Shooting Star. The proximity of this resistance zone adds to the probability EUR/USD will continue to fall inside this Falling Wedge.
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