Trade of the Day: EUR/USD

By: Dima Chernovolov

EUR/USD continues to fall inside the 4-hour Rectangle chart pattern which was recently identified by Autochartist. Autochartist rates the quality of this Rectangle at the 5-bar level – which reflects the slow Initial Trend (2 bars), above-average Uniformity (6 bars) and substantial Clarity (8 bars). EUR/USD is expected to fall further inside this Rectangle – in line with the earlier downward reversal from the resistance area shown below.

As can be seen from the daily EUR/USD chart below – the top of this Rectangle formed when the price reversed down from the resistance area located between the resistance level 1.1900 and the upper daily Bollinger Band. The proximity of this resistance area and the clear bearish divergence on the daily Stochastic indicator increase the probability EUR/USD will continue to fall inside this Rectangle.