Hello Friends, as we can see, the Euro
has recently halted its decline relative to the dollar at the 0.5 retrace from long-term support and is building a small descending triangle
at this important support level
. As always, it is impossible to know for sure which way price will move when it resumes trending, however, this is a descending triangle
in a downtrend at a crucial support level
. Plus a Bloomberg TV speaker declared today that there is the potential for a shakeout since players are still net long the Euro
. It seems to me, therefore, that potential for an explosive move is on the downside. However, a break upwards is always possible especially as the dollar appears to be topping out. Such an upwards break, however, may be suspect and I would trade this more as a short-term move due to the potential for the formation of a right shoulder, which if completed would indicate a head and shoulders
pattern which would, once again, put us on downside alert.