Jan 20, 2010

FX Path

FX Path

EUR/USD - Flag Consolidation Breakdown

Posted: 20 Jan 2010 07:22 AM PST

EUR/USD Daily ChartPrice action on EUR/USD, a daily chart of which is shown, has made a marked breakdown of a bearish continuation flag pattern that previously appeared to be on the verge of becoming invalidated. After the false upside tests of last week (which reached up to the key 38.2% Fibonacci retracement level of the initial downtrend run), price dropped substantially to break the flag to the downside, fulfilling the pattern's customary role as a trend continuation formation. For more technical analysis on this currency pair, please click here for Wednesday’s (1/20/2010) Chart of the Day.

- James Chen, CTA, CMT

* For information on my book, Essentials of Foreign Exchange Trading (Wiley), please click here.
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