Triangle Normally Indicates Breakout, BUT....

Here is your daily outlook for the EUR/USD - March 9, 2010.

The pair continues to move in a sideways fashion.  On the hourly chart we have converging short-term trendlines forming a triangle .  Given that the triangle has formed within a well-established range does not indicate a breakout.  Although, a move above 1.3715 would be our first indication of the possibility, yet would need to pass the resistance levels mentioned below to be a breakout.

The trend remains down, although the EUR/USD is in a correction (albeit sideways).  Downward trendline intersects between 1.3750-1.3800.  Significant horizontal resistance comes in around this 1.38 level as well.

In the short-term, resistance comes in at 1.3700 and 1.3740.  Beyond this there is a resistance area between 1.3790-1.3840.  A break beyond this would indicate a reversal and a move higher.

Minor support has developed at 1.3600 and beyond this at 1.3550-1.3530.  Major swing lows and support levels come in at 1.3450-1.3430.  A break below this indicates another leg down in the downtrend.

Despite the fact this range has sustained itself for some time now, range trading the EUR/USD is generally not a high probability trade due to its high propensity to trend.

Cory Mitchell, CMT