Trade of the Day: EUR/USD

By: Dima Chernovolov

EUR/USD continues to fall inside the hourly Falling Wedge chart pattern, which was previously identified by Autochartist. Autochartist rates the quality of Falling Wedge at the 5-bar level – which is the result of the slow Initial Trend (3 bars), lower Uniformity (2 bars) and strong Clarity (8 bars). EUR/USD is expected to fall further inside this Falling Wedge chart – 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 Bearish Engulfing from the resistance area lying between the resistance levels 1.2300 and the upper daily Bollinger Band. The proximity of this resistance area and the recent breakout of the sharp daily up channel from November increase the probability EUR/USD will continue to fall inside this Falling Wedge.