KEY
TAKEAWAYS
- EUR/USD executes bearish flag formation
- Leaves rising trend channel by breaking rising support line as a result
After a rally from $1.045 to a high of $1.1140 from October to December 2023, the EUR/USD exchange rate has now executed a bearish flag formation which resulted in an acceleration of the decline (strength for USD).
As a result, the currency pair has now also broken below trendline support, adding to and confirming the bearish outlook for the next few weeks.
Based on the flag formation, a price target between $1.0650 and $1.0700 can be calculated. That area coincides with the horizontal (green-shaded) support area that has offered support and resistance over the last 8-9 months.
Upside potential for EUR/USD is now limited as the former support line and the lowest point of the flag are expected to start acting as resistance overhead.
Julius de Kempenaer
Senior Technical Analyst, StockCharts.com
Creator, Relative Rotation Graphs
Founder, RRG Research
Host of: Sector Spotlight
Please find my handles for social media channels under the Bio below.
Feedback, comments or questions are welcome at Juliusdk@stockcharts.com. I cannot promise to respond to each and every message, but I will certainly read them and, where reasonably possible, use the feedback and comments or answer questions.
To discuss RRG with me on S.C.A.N., tag me using the handle Julius_RRG.
RRG, Relative Rotation Graphs, JdK RS-Ratio, and JdK RS-Momentum are registered trademarks of RRG Research.
Julius de Kempenaer is the creator of Relative Rotation Graphs™. This unique method to visualize relative strength within a universe of securities was first launched on Bloomberg professional services terminals in January of 2011 and was released on StockCharts.com in July of 2014.
After graduating from the Dutch Royal Military Academy, Julius served in the Dutch Air Force in multiple officer ranks. He retired from the military as a captain in 1990 to enter the financial industry as a portfolio manager for Equity & Law (now part of AXA Investment Managers).
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