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Euro Trades within a Triangle Pattern

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Looking at the benchmark EUR/USD currency exchange rate on the above four (4) hour MT 4 price chart, the euro currency (EUR) is trading around 1.2220 during the early Asian trade session on Tuesday.

Volume remains low throughout the Forex markets during the last trade week of the year.

Volume remains low throughout the Forex markets during the last trade week of the year.

There is not a lot on the economic calendar to spur price action for either the U.S. dollar or the euro currency which is trading near a one week high in the world’s most liquid Forex market.

As expected, the U.S. Congress overturned President Donald Trump’s veto of the defense spending package. The lower house of the U.S. Congress, the House of Representatives, approved sending American households $2,000 stimulus checks.

The matter now goes before the Republican (GOP) controlled Senate for a vote. The Trump administration has also bolstered the rules making it almost impossible for U.S. investors to invest in Chinese owned firms as the cold trade war ramps up.

The European Union continues to roll out the coronavirus (Covid-19) vaccine as new cases of the pandemic continues to spread. The pandemic is also spreading across the United Kingdom, including the new mutant coronavirus strain as well as in the United States. There are Covid-19 vaccine supply concerns.

Daily Euro Technical Analysis (EUR/USD

Looking at the above MT 4 price action chart, the EUR/USD Forex market is still trading within a short-term symmetrical triangle pattern established back on 17 December.

The euro currency is also sill trading above the one hundred (100) hour simple moving average (SMA).

This key Forex market is also indicating normal relative strength index (RSI) conditions which is encouraging the bulls in the EUR/USD market.  

With that said, the upper line of the triangle pattern at 1.2240 is the first upside barrier to monitor. The next layer of technical resistance comes into play at April 2018 high price point at 1.2275.

On the downside, the first layer of support lines up at 1.2190 with the 100 hour SMA in play at 1.2167. The eight week old rising trend line at 1.2178 then comes into play.

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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