One Pager Positional Report on EUR/USD

EUR/USD SELL @ 1.3645 stop @ 1.3950 TGT 1.3250 – 1.2850 – 1.2450 – 1.2050

            The Rising Wedge is a bearish pattern that begins wide at the bottom and contracts as prices move higher and the trading range narrows. In contrast to symmetrical triangles, which have no definitive slope and no bullish or bearish bias, rising wedges definitely slope up and have a bearish bias. Even though this article will focus on the rising wedge as a reversal pattern, the pattern can also fit into the continuation category. As a continuation pattern, the rising wedge will still slope up, but the slope will be against the prevailing downtrend. As a reversal pattern, the rising wedge will slope up and with the prevailing trend. Regardless of the type (reversal or continuation), rising wedges are bearish.

From the above chart it has been seen that EURUSD has fallen from 1.4940 Level in Feb. 2011 and tested the lower level if 1.2040 in July 2012 where in around one and a half year it has drifted by 2900 pips and after the sharp down trend EURUSD moved upside and retraced by 61.8% retracement of the fall and testing the higher level of 1.3995 at point D where closing was seen below 1.3900 level just near the 61.8% retracement which was coming at 1.3820 level. Recently its facing a good resistance at 1.4000 on breakout basis and 1.3900 on closing basis we expect down trend to continue which is seen in last two consecutive days, Initial support of 1.3720 is broken of the first trend line and is nearing the next support of 1.3480 and if the same support is broken then down trend is confirm and it’s expected to test the level of 1.2050. 

It is forming RISING WEDGE pattern formation where height of the wedge from 1.3485 to the support of 1.2040 comes to 1445 pips and we have seen initial breakdown at 1.3720 and next breakdown is seen at 1.3480. Calculating the target fall from beak down of 1.3480 the expected target comes to 1.2035 which is also the previous bottom in July 2012. Till the time EURUSD is below 1.4000 one can expect the level of 1.2050 in medium to long term, where positional trader can enter with sell position with given target of 1.2850 – 1.2050 level around profit booking in phase manner.