Tech Musings

Euro has been moving sideways and had broken out of the downward channel after 16 weeks of consolidation. If we look at the current chart of Euro we can see that Euro is making an inverse head and shoulder pattern.  Even in right shoulder we can see another head and shoulder forming.  The neck line for breakout is around 1.30 – 1.32 levels. Once euro breaks above 1.32 the target for this pattern would be 1.40.

EURO daily chart

In the weekly chart we can see that Euro has spent almost 15 weeks moving sideways before it finally broke out of this channel. Even if we look at retracement Euro made a high of 1.60 in 2008 and low of 1.18 in June 2010. 50% retracement from there will take Euro to 1.40 levels.

Euro Weekly chart

If we look at quarterly chart of Euro we can see that Euro is moving in a descending triangle and the resistance line for that triangle is around 1.40 levels.

Euro Quarterly chart

Over all I expect that euro should move from current levels of 1.30 to 1.39 – 1.40 levels in next few months. The upmove would be swift. It’s a very high probability trade with a stop loss of 1.27. Traders can go long on euro with appropriate stop loss.