EUR/USD - Potential Inverted Flag Pattern

January 5th, 2010 by James Chen

EUR/USD Daily ChartPrice action on EUR/USD, a daily chart of which is shown, has consolidated in an inverted flag-like formation since late December. This occurs after price dropped substantially starting in the beginning of December, breaking down below a key uptrend that had been in place since the March lows. In the process of dropping, EUR/USD also broke down below several key support levels, most recent of which was the approximate 1.4450 price region. After breaking down below this level in mid-December, price has repeatedly attempted but failed to breakout above it once again, forming the noted flag consolidation in the process. For more technical analysis on this currency pair, please click here for Tuesday’s (1/05/2010) Chart of the Day.

- James Chen, CTA, CMT

* For information on my book, Essentials of Foreign Exchange Trading (Wiley), please click here.


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Posted in Forex Strategy, Forex Trading Strategies
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