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8-point observations for EURUSD according to two equidistant channels

This is a simple EURUSD analysis according to two equidistant channels.

Observations

  1. EURUSD appears to be sliding downwards according to the pink equidistant channel with 3 points of contact.
  2. Blue channel below which is more gradual is equally valid with also 3 points of contact.
  3. Blue may become support.
  4. If Blue does not offer support, EURUSD continuing downward according to pink would be very compelling short.
  5. This outcome also points to USD rally.
  6. If Blue does offer support, EURUSD may converge and get trapped inside apex according to both channels (see black dotted lines).
  7. This outcome offers ranging trade for day traders but becomes difficult to read.
  8. It could also possibly become a descending wedge followed by a bullish move.
EURUSD day chart

EURUSD day chart

A straightforward EURUSD short if the pair continues down the pink channel should be easier to manage and more exciting. Should there be a reversal, appearance of wedge is an early indicator.

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Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.

“Dear reader, I do not have a financial license to give advice. I do not know you the reader. Your financial objective and risk tolerance may be different from mine. I am not responsible for any consequence of your action.

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