Russell Glaser – A sharp decline in the value of the EUR/USD followed by a bounce higher has setup a consolidation pattern that could lead to further declines in the pair.
The 4-hour EUR/USD chart below shows a sharp drop in value for the pair beginning on August 23rd at a price near the resistance level of 1.2730 (R1) to a low near the 1.2610 support level (S1). This drop in the price was followed by a short period of rising prices which failed to close above resistance level, forming a bearish flag pattern.
The next move may be to the downside as the flag pattern is rising. The measured move following a breakout below the lower line of the flag pattern should equal the length of the flagpole, roughly 140 pips.
A continuation of the downward move may send the EUR/USD even lower to the 2009 low at 1.2450 (S2).
Additional resistance can be found at 1.3030 (R2).
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
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