Trade of the Day: EUR/USD
By: Dima Chernovolov
EUR/USD continues to fall inside the daily Down Channel chart pattern which was identified previously by Autochartist. Autochartist rates the quality of this Down Channel at the 4-bar level – which is the result of the slow Initial Trend (3 bars), low Uniformity (3 bars) and above-average Clarity (6 bars). EUR/USD is expected to fall further inside this Down Channel – in line with the earlier breakout of the key support area shown below.
As can be seen from the daily EUR/USD chart below, the pair earlier broke through the support area lying between the key support level 1.1070 (which reversed the price at the end of October) and the 38.2% Fibonacci correction of the previous upward wave from the end of September. This price area is acting as the resistance zone after it was broken. The proximity of this resistance zone increases the probability EUR/USD will continue to fall inside this Down Channel.