EUR/USD: Narrowing wedge implies a strong trend coming

Friday's 4-hour chart is showing the EUR/USD pair is trading in a wedge. Technical analysis textbooks suggest that this may eventually result in the cross picking a direction and then trending strongly. Yohay Elam, an analyst at FXStreet, tries to find out to what direction EUR/USD will break.

Key quotes

“Momentum on the 4-hour chart has all but disappeared. EUR/USD is trading below the 50 and 100 Simple Moving Averages but above the 200 SMA. All in all, bears have a marginal lead.”

“Support awaits at 1.1220, which is the daily low, followed by 1.1185, a stubborn support line from the recent week. Further down, 1.1160 was a low point in mid-June.”

“Immediate resistance awaits at the daily high of 1.1250, followed by 1.13, Thursday's peak. The next level to watch is the double-top of 1.1350 seen in mid-June.”