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The market´s most popular currency pair has an interesting scenario similar to that of the NZD USD. The Weekly Chart shows that it too has formed a Pennant pattern above the current uptrend line and that it is also sitting on top of the Resistance of the larger Monthly Pennant. That Pennant has its Resistance line connecting just below the highs of 1,6036 of July, 2008 and 1,4939 of May 2011, with Support at 1,2324.

As we can see, there was an attempt to break resistance with that recent bull candle, but it came up short of a meaningful breakout. Right now, we could either see another move to break the resistance or another bearish wave back down to the Support of the Pennant. Let´s see what this could look like on the Daily Chart.

A bullish breakout with more convincing candles would be needed to go long. If this takes place, its possible that it would be breaking both the Weekly Pennant as well as a smaller Pennant that could also be forming.

On the other hand, the hesitation at Resistance could be a setup before a bearish reversal to return to the Support area at 1,3657.

Ultimately, the myriad of news releases related to both currencies that make up this pair will determine the breakout direction. Let´s see what the market does this week.

Related Posts : analysis, euro, Forex, nzd, usd, weekly