The EUR/USD triangle: watch out for the direction of the breakout!
The range in the EUR/USD is getting tighter, as market players await an upside or downside breach to determine the pair’s short-term direction.
Triangles are generally considered to work much better in longer frames: from several weeks to several months. This, however, does not mean that they cannot be used to forecast short-term movements in forex trading.
Now let us look at the EUR/USD 1-hour chart. The range here is getting thinner and thinner, as the currency pair is moving into a symmetrical triangle (see chart). It is a matter of days, possibly hours, for the major cross to make a more decisive move up or down.
While you are taking advantage of the opportunity to buy the EUR/USD when it touches the rising support and selling when it touches the declining resistance, watch out in which direction the breakout occurs. It would be better to wait for an hourly close to confirm the signal. This will give you an idea in which direction the pair is heading, at least in the short-term.
No matter where the breakout occurs, keep in mind that the current bias is negative, so an upward movement would probably be limited to the crucial 1.3480-1.35 resistance.
This article expresses the own opinion of Profitease.com, which is based on chart observations. It should not be taken as advice on buying or selling any financial instrument! Profitease.com does not accept any liability for losses or other damages endured as a result of using this article for trading purposes!
