EUR/USD: A Bullish Formation Near a Channel Peak?
2023.11.10 02:17
is continuing to trade in a rising channel formation, reminiscent of a bearish flag given the trend that preceded it but recent signs may suggest it’s not that straightforward.
The first thing worth noting is that the bearish flag formation isn’t ideal in that the sell-off that makes up the pole element isn’t particularly sharp and the time it’s traded in the flag is a little long.
That said, it can still be argued to be a bearish setup. But what we’ve seen over the last week is arguably a case for the opposite.
The price has rallied back to the upper end of the channel and while it failed to break significantly above and hold, it also hasn’t reversed course strongly. Rather, it’s eased lower and appears to be edging higher again.
Source – OANDA on Trading View
The 4-hour chart below highlights this better and arguably shows a better example of a flag formation, albeit bullish in this case.
The initial price action from the start of the month looks more powerful and the flag is shorter. Yesterday’s breakout, therefore, could be a bullish signal at a time when the pair is already trading near the top of the orange longer-term channel. A break of this could be significant.
Source – OANDA on Trading View
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