Since the end of January EURUSD has traded in
triangle consolidation. The Euro appreciation has been stopped by returned concerns
about debt position of Spain and Italy. In addition uncertainty about French elections and upcoming Greek one are fuelling market volatility and rising investor indecisiveness.
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| EURUSD triangle consolidation |
Such market environment is precondition for
technical triangle formation - consolidation. This figure usually is trend
confirmation sign, which means that next target could be 1.3550. However, if
key support line at 1.30 is broken, than 1.2620 would be reachable. The last is
less likely as it would happen if stock market continues with the correction,
but still important to consider.
Mentioned target levels are determined by two
technical formations that could appear in case of positive or negative breakthrough
of the triangle. If the triangle is broken than the following move could be as
much as 380 pips the length of the move before triangle was formed. In the
positive case the target is limited by cross point of 380 pips length and the
trend resistance (the blue line). In the downward case the technical figure “head and shoulders” could be shaped.
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