By Russell Glaser – The 4-hour EUR/USD chart is showing technical signs that the bearish streak has overextended itself and the price of the pair may rise in the near term.
Below the Forex Technical Analysis of the EUR/USD 4-hour chart shows a strong downtrend with two trend lines, one long term and a second trend line that is much sharper and spans a shorter term time frame. The technical analysis shows the pair could see a short term appreciation.
A bullish cross has formed on the Slow Stochastic Oscillator, indicating that the pair could rise in the near term.
The 7-day Relative Strength Indicator is currently floating in the overbought region and appears set to breach the 30 line. This would indicate a signal to sell.
It appears that the RSI line has formed a reverse head and shoulders pattern. Therefore, traders may want to wait until the RSI line breaches the neckline of the head and shoulders pattern before covering their short positions in preparation for a retracement.
This strategy may pay off for patient traders who can then enter into the market at a later time with a better price after a retracement.
Forex Market Analysis provided by Forex Yard.
© 2006 by FxYard Ltd
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