(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; downtrend lines in red; chart pattern in yellow; 50-period simple moving average in light blue.)
6/04/2008 – EUR/USD – Within the context of the short-term downtrend on the EUR/USD hourly chart, as shown, price has formed an inverted flag formation. The downtrend is represented on the chart by the two red parallel lines, while the flag is outlined by the two yellow lines and the long red bar. As flags are considered primarily continuation patterns, technical traders are looking for a clean breakdown of this flag. In this event, initial support resides around the 1.5360 region, a significant prior support/resistance level. Below this, the length of the flag pole projected down provides an indication of additional support to the downside.
Chief Technical Analyst
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