EUR/USD continues the correction of the rally from 1.04934 to 1.20924 (from 22nd February 2017 to 8th September 2017) and the possible first wave to the downside (from от 1.20924 to 1.15529) developed within a trend channel (in red) reaching the trend lines of support and resistance twice and breaking out above the resistance trend line at around 1.1740.
The test of the resistance trend line also developed up until now. If we interpret the trend channel as a flag then the pair should rally and test the local high at 1.20924 after which it should develop another wave to the downside as a part of the correction.
The second scenario is for this to be a false breakout and for the pair to drop directly to 1.1480 and below.
The third scenario is for the development of an inverted head and shoulders pattern (in blue) after which the pair will resume its rally to 1.2092.
Thank you for sharing your assessment!
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