EUR/USD (daily chart as of December 16, 2013) has been trading in a steep uptrend and making higher highs and higher lows for more than a month. Price recently accelerated its upside momentum after breaking out above the upper border (lower bold blue line on chart) of a narrowing trading range on December 5 (green arrow on chart). The currency pair overshot the upper border of a newly formed short-term uptrend channel (bold green parallel lines on chart) on December 10, 11 and 12 (pink rectangle shape on chart).
The candlestick of December 10 had a small real body with a longer upper shadow that exceeded the height of its own real body, indicating strong resistance at its session high. The candlesticks of December 11 and 12 formed a potential bearish engulfing pattern with the second real body engulfing the entire first real body. Those were the signs of weakening momentum at the upper border of the short-term uptrend channel, signaling a potential trend reversal if price is unable to clear the key resistance of 1.3830.
Support levels below:
1st support: lower border of the medium-term uptrend channel
(bold blue channel)
2nd support: lower border of the short-term uptrend channel
(bold green channel)
3rd support: daily EMA 50
Resistance levels above:
1st resistance: upper border of the short-term uptrend
channel
2nd resistance: 1.3830 (October 25 high)
3rd resistance: upper border of the medium-term uptrend
channel
No comments:
Post a Comment