The sell-off in the euro since late this morning has the pair looking a little bearish on the daily chart. However, a look at the 4-hour chart may tell an entirely different story.
Here, it would appear that the pair has broken above the descending trend line and is now retesting it as a new level of support. Should it hold, as it now appears, this would act as confirmation of the original break and therefore be very bullish.
The current candle on the 4-hour chart is also looking quite bullish having rallied aggressively higher since falling back to 1.3629. It will be interesting to see how both this and the daily candles close.
A close above the trend line in both cases would look very bullish, with the next target being 1.3682, today’s high, and more importantly, 24 January highs, with the pair then potentially making new highs above this level.
About Craig Erlam
Craig Erlam is Market Analyst at Alpari UK. He joined Alpari (UK) at the beginning of 2012 after four years in the financial services industry, including working at Goldman Sachs. Craig writes market commentary that regularly appears on websites including The Financial Times, Reuters, BBC, The Telegraph and FOX Business. He also provides insight and analysis for clients which he posts daily on Twitter and the Alpari (UK) website. You can also find Craig on YouTube where he gives short market updates, including charting analysis.