EUR/USD Setting up a Consolidation Range for a Breakout Trade
By Fan Yang | February 1, 2013 2:06 AM EST
Forex Technical Update
EUR/USD 1H chart 1/31/2013 9:55AM EST
Consolidation: The EUR/USD has been in the habit of rallying, then consolidating sideways. It did so in a larger degree around mid-January for a couple of weeks. Then last week, we had almost a full week of range-bound action before bullish continuation. Yesterday (1/30), the EUR/USD was again trading sideways showing resistance around 1.3585/90, while setting up support at 1.3540, with another support pivot near 1.3530.
Breakout scenarios: The 1/31 price action set up the support and is showing some pressure towards the consolidation range high. If it breaks it, it continues the bullish trend toward 1.36 handle and beyond. You can tell its in a bull trend by looking at the price action, RSI dynamic, and the alignment moving averages.In the bullish break scenario, you can use the width of the range as a conventional temporary target, which would project to 1.3630-40.
However, a fall back below 1.3530 could be a sign of some correction ahead. In the bearish break scenario, we are looking at last week's consolidation range as a target/support to test, down tot he 200-hour SMA, which sits above teh 1.34 handle, near last week's consolidation lows.
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.
Most Popular Slideshows
- Jeremy Lin, Kobe Bryant Among The Top 5 Overpaid Players In The NBA (Part 1 - Western Conference)
- Reasons Why Michael Jordan Is Better Than LeBron James [PHOTOS And VIDEO]
- Dwyane Wade, Joe Johnson, Amare Stoudemire Among Worst Contracts In The NBA (Part 2 - Eastern Conference)
- Brawl-Marred Game in NFL Week 3: Philadelphia Eagles 37, Washington Redskins 34 [PHOTOS]
Join the Conversation
- New Samsung Galaxy Note 4 and Galaxy S5 Android 5.0 L Killer Features, Encryption and More
- Google Release Roundup: New Nexus 6, Nexus 8, Android 5.0 L Launch and Killer Features
- Xperia Z, Xperia ZL, Xperia ZR Android 4.4.4 KitKat Update Guide
- Moto G 2014 v Asus Zenfone 5 – Specification Comparison Shows Zenfone 5 Is A Good Alternative for Moto G
- Nexus 8, Nexus 9 Release Date, Device Name And Price Conundrum: What To Expect?
- New Zealand Could Be Next ISIS Target After Australia Beheading Plot, Says Expert
- China Is Also Seizing Disputed Land Along Indian Border