Dear traders,
the EUR/USD showed more strength yesterday after the FOMC statement by the US Central Bank (FED), which indicated no substantial changes for the next year or two.
Despite the bullish breakout above the resistance trend line (dotted orange), price action is reaching a resistance zone that could send price lower again. Let’s review.
The EUR/USD wave patterns remain the same for the moment. The current bullish swing is probably a wave A (grey) of a larger ABC in wave B (pink).
On the 1 hour chart, price action made another push up. This invalidated our bearish analysis yesterday. But despite our bearish view, the confirmation of the breakout on the 4 hour chart never occurred. Instead price action broke above the Fractals (purple box), which we indicated were key for one more bullish push up. This is why using confirmation and invalidation is critical for trading and we can see its purpose this week:
The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter.
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