Volatility is contracting on EURUSD, as we have what appears to be a symmetrical triangle pattern that has been in formation since around mid-April of 2015 -- so basically over the past 4 months. During this time there has been quite a bit of news surrounding the Euro and its relationship to Greece, much of which has been tumultuous and cast doubt about the Euro's future, but price has remained relatively stable. Is this confirmation that the bottom is in? Are we now seeing buyers accumulate Euros?
The chart below illustrates one way to trade it. Going long at support at 1.0859, with a stop at 1.0746 and targeting resistance at 1.1401 gives a reward/risk of just under 5.
If we take a longer term perspective and zoom out to the monthly chart, we may find justification in targeting resistance at 1.2235. This would give us a reward/risk ratio of almost 13:1.
The chart below illustrates one way to trade it. Going long at support at 1.0859, with a stop at 1.0746 and targeting resistance at 1.1401 gives a reward/risk of just under 5.
If we take a longer term perspective and zoom out to the monthly chart, we may find justification in targeting resistance at 1.2235. This would give us a reward/risk ratio of almost 13:1.
Volatility Contracting on the Euro -- is a Great Long Term Buy Opportunity Emerging?
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