EUR/USD – Pennant Breakout Signals Bullish Continuation

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EUR/USD - Pennant Breakout Signals Bullish Continuation

Yesterday we looked at the pennant that EUR/USD was forming and the possibility of a bullish breakout after it found support at a previous support pivot of 1.1071. Let’s follow up on the technical development.

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The 1H chart shows that EUR/USD indeed broke above the pennant, which prevents a bearish outlook and at least signals a sideways market if not a bullish continuation. The RSI pushed back above 70, which revives the bullish momentum in this time-frame.

Now, if price can hold above 1.1150, and the 1H RSI above 40, we should have a bullish attempt to break 1.1290, which would open up 1.1460, the next support/resistance pivot seen in the 4H chart.

A break below 1.1150 however flattens the outlook and puts pressure back towards the 1.1070 area.

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.