Technical Trading Tips and Techniques by 
(Please click on the accompanying chart to enlarge.)
As I’ve been blogging about in the last couple of days, EUR/USD (a 4-hour chart of which is shown) has been entrenched in an increasingly relevant short-term downtrend channel. After hugging the bottom of the channel on Thursday, price indeed popped back up (as of early Friday morning in New York) for a correction targeting the top of the channel once again. Currently, the top of the channel resides around the 1.4175 region. A breakout of this level should target immediate further resistance above the channel around the 1.4225 area. A bounce back down at or near the downtrend channel resistance line should target the bottom of the channel once again.
UPDATE: As of a bit before noon (New York session), price has reached and tentatively poked out slightly above the abovementioned downtrend channel resistance line. Before this can be judged a break, though, we would be looking for a close above the channel.
- James
James Chen is the Chief Technical Analyst at FX Solutions, a leading Forex broker. He is also a registered Commodity Trading Advisor (CTA) and a Chartered Market Technician (CMT) Level 3 candidate. At FX Solutions, Mr. Chen writes daily currency analysis, conducts forex trading seminars, and has authored numerous articles on currency trading and technical analysis for major financial publications. His upcoming book, Essentials of Foreign Exchange Trading