Since the start of March 2013 the USD has not really done much at all. However now we are at the end of market, you can see that both the buyers and sellers have been squeezed and this is now a pennant pattern.
Eventually this will have to breakout to the upside or down below on the downside.
The rules with pennants state they will break the direction of the price action that precedes them. So in this case, it is most likely the USD price will break to the upside, past 23 and head higher.
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| pennant pattern |
If this is indeed a pennant and the USD is inside a pennant as drawn above, the USD should rise, and the market will come into trouble. Right now things are still in limbo no doubt.
The only downdraw to all this, is that pennants can last for days, weeks or months, however this pennant looks to be a good one, and we will continue to monitor the currency market after the EASTER break.
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