EUR/USD rallying within broadening formation
The pair has seen yet another sharp rally this morning, following on from the big move higher yesterday afternoon. It is clear that as this week progresses, volatility is rising to create a broadening formation.
These patterns are invariably difficult to trade. However, the key here is the ability to break through both trendline (1.1323) and horizontal resistance (1.1339) to continue the creation of higher highs.
It is worth bearing in mind that this pair has been trending lower throughout April and thus the longer term outlook portrays a market which could turn lower once more rather than break through the 1.1396 level. With that in mind, a bearish outlook would be preferred around around the 76.4% level at 1.1355, where a break through 1.1397 negates this expectation for the market to turn lower in the near future.