Trade of the Day: EUR/USD

By: Dima Chernovolov

EUR/USD continues to fall inside the hourly Down Channel chart pattern which was identified recently by Autochartist. Autochartist rates the quality of this Down Channel at the 5-bar level – which reflects the slow Initial Trend (3 bars), average Uniformity (5 bars) and higher Clarity (8 bars). EUR/USD is expected to fall further inside this Down Channel – in line with the earlier breakout of the key support level shown below.

As can be seen from the daily EUR/USD chart below, the pair earlier broke through the key support level 1.0930 (which formed the double bottom in September). This price level is acting as a strong resistance after it has been broken. The proximity of this resistance level and the strength of the downtrend visible on the daily charts increase the probability EUR/USD will continue to fall inside this Down Channel.