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Euro Currency Stuck in a Rising Wedge Pattern


Looking at the world’s most liquid currency exchange rate, the EUR/USD, on the above daily MT 4 price chart, the euro currency has finally broken above 1.23. This benchmark Forex market took four attempts but the bulls finally prevailed.

Overnight, in Washington DC, the capitol of the United States, all out madness took place. President Donald Trump incited his supporters to violence.

They took to the streets, violence, rioting and death. The U.S. Congress was stormed by armed militants which forced the government to flee and delaying the certification of the Electoral College. At last report order has been restored. Capitol Hill is secure and the U.S. Senate is back in session.

As far as economic data is concerned, the United States’ Department of Labor will release weekly first time and continuing claims jobs data. As far as the euro area is concerned, Germany will publish monthly factory orders.

Italy will release monthly retail sales and their preliminary consumer price index (CPI). The Eurozone is also publishing their preliminary consumer price index as well. The European Central Bank will release their monetary policy meeting policy account.      

Daily Euro Currency Technical Analysis (EUR/USD)

During the Asian trade session, the euro was trading around 1.2330/31. The above daily EUR/USD price chart is showing that this currency exchange rate is stuck in a rising wedge formation as the rally from 1.1601 continues. 

This rising wedge pattern are the converging trend lines connecting higher lows and higher highs. Forex traders should note this could be a bearish reversal signal.

A daily close below the rising wedge trend channel lining up at 1.2278 would single a possible breakdown and price action change. In this scenario the EUR/USD Forex market could focus on 1.20. There is also a bearish convergence 14 day relative strength index (RSI) which bolsters the case for the rising wedge price reversal.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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