Recently, the EUR/USD confirmed a break-out from a bull flag chart pattern observed on the 4 hour time frame. Since the break-out, there has been some buying opportunities, but trading has been very difficult because of the choppy nature of the price action. I always tell our traders to make sure to analyze larger time frames, especially when the intraday charts become confusing. A weekly chart will tell you that a higher low has been formed, and if you look at the candlestick that just closed, there is a long tail on the bottom. Also, notice the upward sloping trendline on the 4 hour chart is still intact. These are bullish signs. The most recent action may have been bearish intraday, but I believe this is a buying opportunity in the bigger picture. For the upcoming week, watch for price to hold above the 1.3700 area. If a 4 hour candle or larger time-frame closes below the 1.3700 swing low support, I would stop looking for longs and wait to see how the market behaves from there. As for long positions, it is important to wait for momentum to shift back to the bullish side. This means price should take out a swing high from a smaller time frame atleast, and not break below support levels. If the bullish signs persist and we see some price action follow through, we can see a break of the 1.3850 high and push into the 1.4000 area this coming week.
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