As the daily EUR/USD continues to bounce lower off the 34EMA low (bottom line of the Wave) the U.S. Dollar Index has found its way higher above the psychological 86.00 level. The shift of psychology for dollar strength is significantly improved by trading above the “00”. However it should noted that there is intraday resistance at 86.20.
In the meanwhile the EUR/USD has not found enough support to rally above the 1.3000 level and while there is no lower low on the daily chart, there are congestion set ups that can be found on the shorter term intraday charts. These shorter term charts are also perhaps a better, lower risk alternative for traders. A one hour chart inherently will have less risk than a daily chart set up. It’s a function of how much a single one hour candle will travel compared to the 24 hour candle of the daily!
The sideways market cycle makes for a perfect environment for consolidation and congestion patters.
The chart pattern that has developed is a triangle pattern that is currently sitting on the support of the uptrend line.
While the overall trend (daily) is down in the fiber, the 60 minute inatrday time frame has transitioned to a sideways market cycle and offers traders a lower risk and second change entry to capitalize on the EUR/USD weakness and dollar’s rally above 86.00.
You can download the GRaB plug in for MT4 here.
Patterns alerts supplied by Autochartist chart pattern recognition software.