EUR/USD had a seemingly never-ending losing streak: 6 weeks of consecutive losses. During this time it traded under downtrend resistance.
However, after the most recent dip, the pair made some kind of correction, and this is downtrend support. So, the pair is trading in this nice triangle that is not symmetric in the length of the lines, but the steepness is quite similar. Have a look:
The fall came monetary policy divergence: the ECB went through and announced massive QE after a long preparation, while the Fed is on course for rate hike in 2015. The Greek elections gave the pair the last nudge down, but from there we had a correction.
The lines meet on February 4th, at around 1.1330. The pair is currently just below this level, but trades at the middle of this triangle.
The normal technical behavior after such range trading choked in a wedge is a breakout. But to which direction?
The fundamentals still point to the downside in the long term, but could we see a bigger correction before a resumption of the downtrend?
More: EUR/USD: No Defying Parity; New Targets – BNPP
