Breakout Time for EUR/USD?

12/12/2008 10:25 am EST

Focus: FOREX

(Price on 1st pane, Slow Stochastics on 2nd pane; uptrend line in green; downtrend line in red; horizontal support/resistance levels in yellow; chart pattern in magenta; Fibonacci retracement levels in grey; 50-period simple moving average in light blue.)

Thursday’s price action on EUR/USD (a daily chart of which is shown) has made a decisive bullish break of the triangle consolidation that it had been entrenched in for the last month and a half. This eagerly anticipated breakout has reached up to the key 1.3250-1.3300 resistance target, as of this writing. This zone represents both a significant prior support/resistance level and a key 38.2% Fibonacci retracement level.

Any substantial break above this price region (i.e., the 1.3300 level) would likely indicate that a significant upside correction could be in the midst of occurring. In this event, further major resistance to the upside should reside around the downtrend resistance line (in red), and then eventually, with any further upside momentum, the key 1.3880 level. A failure to break convincingly above the 1.3300 resistance zone, however, could mean an eventual retreat back down to support in the region of the triangle border.

By James Chen, Chief Technical Analyst, FX Solutions

Related Articles on FOREX

Keyword Image
U.S. Treasury Yields Fall
04/24/2019 12:33 pm EST

Recent strength in benchmark US Treasuries suggests weakness in economy, notes Fawad Razaqzada....

Keyword Image
Trading Currency Pairs
04/24/2019 9:05 am EST

Traders can utilize ETF pricing to initiate pairs trade in forex markets, writes Paul Cretien....

Keyword Image
British Pound Surviving Brexit
04/23/2019 12:16 pm EST

What doesn't kill you makes you stronger? That appears to be the case for the pound sterling accordi...

Keyword Image
Weekly Forex Outlook
04/23/2019 9:30 am EST

Bill Baruch President of, breaks down the fundamentals in the foreign exchange m...