EUR/USD Is Forming A Possible Flag

Apart from the strong support zone around 1.1150 – 1.1170 which EUR/USD could not break out below, above this zone we can see that the pair is forming a trend channel (possibly a flag) with a 98 pips height at its base.

Here there are two possible scenarios, in my opinion. EUR/USD will either directly break out above the resistance trend line and rally to 1.1350 or it will fall to the support trend line and only then it will renew its move to the downside.

If it breaks out below the support trend line, I think we could expect a drop to 1.1060 – 1.1050.

I believe that my expectation for a rally to 1.1500 remains valid. In my opinion, it’s not a question whether it will happen but when it will happen. I think that we could expect such a rally in the medium term, i.e. in a month and half – two months, considering how the pair has developed so far.