5:14a GMT - I've been bullish on the EURUSD for three days running now and not much has happened - none of the recent signals have triggered the defined trade as the pattern has been locked in a tight consolidation pattern between 1.4570-1.4450. If you back out to the 4-hour chart you will quickly notice two things: first, that the medium term trend is down and, in fact, if you back out to the daily chart the recent uptrend since 12/22 technically appears to be a mere correction of the drop from the 1.5140 area. Second, you will notice that in the short term (since 1/8) we have seen a bullish flag followed by that tight consolidation that past couple days.

Daily Outlook: I view this tight range the past few days as a bullish consolidation pattern on a flag pole, meaning a breakout is more likely to the upside. Though at this point, after 2 days of tight consolidation, a breakout in either direction is likely to produce a large move so I will watch my stops carefully.

Trading Idea: My primary trade remains the same - look for long opportunities in the 1.4400 support area. From here my targets will be 1.4435, 1.4475, 1.4505 and 1.4535. However, given the tight consolidation I believe the initial break below 1.4450 could produce a quick ride down to 1.4400 as well.

(click to enlarge)

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