By Russell Glaser – The range trading that the EUR/USD has experienced over the past month may continue. The price is approaching a significant resistance level and the 4-hour chart is showing technical resistance building, hinting at potential drop in the price.
Below is the EUR/USD 4-hour chart. We can see the short term bullish trend that has developed recently as the pair has been consolidating between the price levels of 1.3535 and 1.3735. The price is approaching the resistance line of 1.3735. A break of this price level could propel the pair to its next resistance level at 1.3835.
However, the forex technical analysis of the EUR/USD shows technical resistance is building on the chart. The Stochastic Slow Oscillator shows a potential bullish cross has formed, indicating the possibility for the price to fall. The 7-day Relative Strength Indicator is also floating in the oversold region. This is a warning to traders that the pair may be overbought.
If the price fails to break the 1.3735 resistance level, we could see a reversal back down to the 1.3535 support line. From there the range trading and consolidation of the pair could continue.
Forex Market Analysis provided by Forex Yard.
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