The ascending channel on EUR/USD’s 4-hour time frame is still pretty solid for now, as the pair just bounced off the bottom recently and is trading around the middle.
Judging by that bullish pennant pattern, it appears that EUR/USD is ready to make another test of the top of the rising channel. A strong candle break above the 1.3400 handle could mean that this pair is ready to test the 1.3500 area.
On the other hand, a break below the pennant pattern could mean a test of the bottom of the channel or possibly a break below. Stochastic is pointing down at the moment, suggesting that there is enough bearish momentum.
By Kate Curtis from Trader’s Way