EUR/USD H4 moves along the uptrend line practically since march 2015 (when YTD lows where drawn). At the turn of September and October however, the line is very actively tested. Today we witnessed another of its test at the point of 1.1170, coinciding with medium-term resistance/support horizontal line. Wedge pattern that is forming since mid-holiday, begins to narrow. Currently, investors should expect an attack on pattern upward bound (which coincides with 1.1290 resistance). Only after breakout from current wedge – upward or downward one – we will be able to predict further price movements.
Wider view, interval W1
However, when taking a more broad perspective into account – e.g. weekly chart – we can clearly see that demand move observed since march 2015 is just a correction or wide consolidation. Until the growth impulse will not retrace 50% of the 2014 downtrend, we have to assume that the observed movements are just corrective ones. In addition, the price this year was not able to defeat resistance zone between 23.6% Fibonacci and 2003 low at 1.1370. Therefore, as long as price finds itself below this important area, investors should look for short opportunities – following the long-term trend.
