By: Dima Chernovolov
EUR/USD continues to fall inside the hourly Down Channel chart pattern which was previously identified by Autochartist. Autochartist rates the quality of this Down Channel at the 9-bar level – which is the result of the sharp Initial Trend (10 bars), significant Uniformity (7 bars) and near-maximum Clarity (9 bars). EUR/USD is expected to fall further inside this Down Channel – in line with the earlier breakout of the support zone highlighted below.
As can be seen from the daily EUR/USD chart below – the price earlier broke the support area lying between the key support level 1.1070, support trendline of the daily up channel from September and the 50% Fibonacci correction of the previous sharp upward price impulse from last year. This price zone is acting as the strong resistance area after it was broken. The proximity of this resistance area adds to the probability EUR/USD will continue to fall inside this Down Channel.