EUR/USD Trading in a Short-Term Narrowing Range

EUR/USD (daily chart as of December 4, 2013) has been testing the lower border of the uptrend channel (bold blue parallel lines on chart) for about a month, and in the meantime, has managed to hold a short-term uptrend line (bold green line) connecting the November 7 low and the November 21 low. Price is trading in a narrowing range of those two converging lines.

The currency pair retreated today from just below the upper border of the narrowing range towards a retest of the lower border of the range again, if 1.3520 (close to the lows of December 2 and 3) is unable to hold. Watch closely the significance of the short-term support line. If price breaks down below the line with follow-through confirmation, the narrowing trading range would be considered a continuation pattern, and the prior downtrend may resume.

Support levels below:
1st support: 1.3520 (December 2 and 3 lows)
2nd support: short-term uptrend line
3rd support: 1.3400 (November 21 low)
4th support: daily EMA 200 or 1.3300 (November 7 low)

Resistance levels above:
1st resistance: 1.3620 (November 29 high)
2nd resistance: lower boarder of the uptrend channel
3rd resistance: 1.3710 (February 1 high)
4th resistance: 1.3830 (October 25 high)