Trade of the Day: EUR/USD

By: Dima Chernovolov

EUR/USD continues to fall inside the hourly Down Channel chart pattern, which was previously identified by Autochartist. Autochartist measures the quality of this Down Channel at the 6-bar level – which is the result of the slow Initial Trend (1 bar), and strong Uniformity and Clarity (9 bars) EUR/USD is expected to fall further inside this Down Channel 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 price earlier reversed down with the daily Japanese candlestick reversal pattern Bearish Engulfing from the resistance area located between the key resistance level 1.1900 (which has been reversing the pair from August), upper daily Bollinger Band and the 61.8% Fibonacci retracement of the previous downward impulse from September. The proximity of this resistance area adds to the probability EUR/USD will continue to fall inside this Down Channel.