FXstreet.com (Barcelona) - Eur/$ continues to chop in tighter and tighter ranges since the Oct low at 1.2335, supported by the bullish trendline since that low (currently at 1.2525), and capped by the bearish trendline from Dec (currently at 1.3330). Note that the market has reversed lower after the earlier spike above that resistance (also a 50% retracement from the March 19th high at 1.3735), potentially forming a bearish false break, and raising potential for declines back to the Apr 22nd low at 1.2890 and even the base of the pattern ahead (see ideal scenario in red on daily chart below). Looks like a good risk/reward short area here (currently at 1.3260), as a close above that bearish trendline (currently at 1.3330/45) would abort this negative view, and be a sign to stop (limited risk). Note too that such a close above there could trigger a further upside acceleration, so would also reverse to the long side on such a move. Resistance above there is seen at 1.3405/15, while support before 1.2890 is seen at 1.3135/45. Note, stopped on the Apr 21st short at 1.2980 on last week's break above the bear trendline from early April (then at 1.3110, closed at 1.3140).
Longer term no change, as the view that has been in place over the last few months of an extended period of wide ranging, remains in place. At this point, may be forming a large pennant/triangle, generally seen as a continuation pattern, and raising scope for a downside resolution. However, most other currency pairs appear to be pointing to a downside resolution of the $ (upside for eur/$), greatly lowering the confidence in the triangle/pennant view. Note too that a close above the ceiling (currently at 1.3330/45) would abort, and greatly increase the likelihood for gains all the way back to the Dec high at 1.4715 and even temporarily above. Switched the longer term bias to the bearish side in the Apr 21st email, but will want to reverse it to the long side on a close above the ceiling/bearish trendline from Dec.
For more information, read our latest forex news.