Hello forex peeps, here’s an update on the Euro against the US Dollar. The last time my colleague posted on the EUR/USD was when the ascending channel in the 4-hour chart was still intact (kindly see his post here). By the way, if you want to see his analysis when he made a “buy call” also on the EUR/USD as it had just broken out from the cup and handle formation in the daily chart last September, please see this link. Anyway, the ascending channel in the 4-hour chart may have been broken already but that’s because the pair decided to consolidate sideways. This might be a good thing, because right now, the fiber (EUR/USD nickname) could actually be forming a symmetrical triangle as it moves sideways. Zooming closer to its 4-hour chart, you will see a clearer picture of this area pattern. Symmetrical triangles are naturally neutral regarding which direction it would head but if we factor in the current trend, which is the uptrend, then this formation will most likely be bullish by 90%.
Based on the given symmetrical triangle formation, the EUR/USD could further strengthen against the US Dollar if it breaks out from this area pattern. In case it does, the pair could rise and find some resistance at the 1-month high of 1.4951. If the pair clears out that resistance, the next one could be 1.4579. On the downside, if the triangle pattern turns out to be bearish which is most unlikely, the immediate support could be 1.3700. If the fiber still drops below the 1.3700 marker, the next support could be 1.3335. As the EURO could head further north against the US dollar, in my colleague’s last post suggests that the US dollar could also weaken again not only against the EURO but most currencies (here’s the post).