EUR/USD Assessing Range Setup
- 4H and 1H: We noted the possible rally to start the week because the EUR/USD was at support to end last week. (Refer to Weekly Technical Update 11.20.2009). We start this week with a sharp rally in the Asian and European session to the channel resistance at 1.5000.
- In the US session, the pair is has paused and there is a possibility that it will stay in the range. The aggressive nature of the rally warns us against bearish consideration but we have seen such action within this channel so it is not relatively that aggressive.
- Taking a look at the 1H timeframe, we can assess the reward to risk in anticipation of a bearish trigger. So far, we have a possible development of rising consolidation channel. We see that at best this short-term bearish outlook yields a 1.6:1 reward to ratio.
- An engulfing pattern to close the hour can be the trigger.