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The pattern started on the 30th of September, 2012, when the pair dipped to 1.2804; currently it is trading at 1.3306; gap between pattern's support and resistance narrows by 120 pips in 50 bar period. Trading volume is U shaped (higher in the beginning and the end and lower in the middle of the pattern) in the length of the pattern. Technical indicators on aggregate point at appreciation of the pair suggesting it might attempt to breach pattern's resistance once more. Long traders could focus on the weekly pivot (PP) at 1.3326, weekly pivot (R1)/recent high/pattern's resistance at 1.3396/1.3419 and Bollinger band/weekly pivot (R2) at 1.3456/73.
Market has significant bearish tendencies as 68% of traders have sold the Euro versus the greenback. Short traders could focus on the weekly pivot (S1)/20-day SMA at 1.3248/25, weekly pivot (S2)/pattern's support at 1.3179/56, weekly pivot (S3) at 1.3101 and 100-day SMA/Bollinger band at 1.3017/1.2994.
Main fundamental events which could have significant impact on pairs development in the near future are ECB President Mario Draghi speech on 22nd of January, Federal Open Market Committee statement on 30th of January, Spanish 10-year bond auctions on 4th and 7th of February and the ECB Minimum bid rate announcement on 7th of February.
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