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Congestion breakout: The EUR/GBP was trading in a congestion, or triangle consolidation pattern since last week. It did so around a key falling trendline, seen better in the weekly chart. The 4H RSI reading hit 70, then during consolidation remained above 4 and is now pushing above 60. This RSI dynamic reflects bullish momentum developing in the 4H chart.
As you can see in the weeklychart, this bullish attempt is also an attempt to clear above a key declining trendline that goes back to July 2011. The first resistance pivot to monitor is the 0.8155 level, which use to be support back in 2010. Above that, a swing projection targets 0.8260, near the 38.2% retracement at 0.8262. (Retracement of 0.9082 to 0.7756 bear run since July 2011).
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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