Friday, August 11, 2017

EUR/USD Is Developing A Correction

The EUR/USD rally stopped at 1.1900 but for the moment there’s no clarity how the pair will develop.

After dropping with about 230 pips the pair has been moving within a tight range for three days exactly in the zone around the middle line of the Bollinger Bands indicator on the D1 time frame, forming yet another barbed wire pattern which is very clear on the same time frame.

That barbed wire pattern could continue developing for a few more days, but after that ends the possible scenarios are two:

There could be a drop to the support trend line or a rally to the resistance trend line.

Examining the H4 time frame, at this stage I think that there could be a possible corrective movement to 1.1870, after which there could be a possible drop to 1.1660.

I think that the scenario in which the pair would rally again and break out above the resistance trend line is less valid.