Good morning Dynamic Traders
We are looking at the Euro Dollar chart this morning and identifying the trading cycle on this pair. Below is a weekly chart and the areas highlighted in green are area where this pair has previously found congestion. Notice the areas of congestion are at the big figures and then a breakout took place and a continuation to the upside.
Where the pair is right now is a congesion zone. This is where swing traders may choose to stand aside and wait for a trading opportunity. Traders can still trade this pair on a shorter term basis but this requires analysis on smaller time frames as trends will be more obvious.
A support from the trendline and also the previous double bottom will often act as a spring board should the price reach those levels. For a continuation to the upside we need to break the all time high shown in the green zone.
Forex chart below courtesy of Advanced Get. Data is provided by eSignal.
Further forex analysis at www.fxcps.com
Forex Analyst
Anne Chapman
