EUR/PLN Near Major Support - Breach or Bounce both Tradable
The Euro and Polish zloty (PLN) is testing a major support area on the daily chart, in place since June of 2018
The support area is a large one, between 4.26 and 4.237.
The price has been consolidating around 4.26 since Dec. 17. The high of the consolidation is 4.2755 and the low is 4.2528 (small pink rectangle).
The breakout direction for that consolidation could indicate the direction the pair is likely to move over the coming months.
A break lower from the two-week consolidation (small pink rectangle) means the price is still in the support area, but could keep falling to test the 4.23 region. A continued drop below the support area indicates a further decline to the next major support area between 4.16 and 4.13.
A short trade has the added benefit of a positive roll. The Eurozone has 0% interest rates, while Poland has an interest rate of 1.5%.
If the two-week consolidation breaks to the upside, it could be inferred that the large support area has held and the price will continue oscillating in a large range. Range resistance is 4.40 to 4.42. If the EUR/PLN rises, that is the target over the next several months.
The support area is a large one, between 4.26 and 4.237.
The price has been consolidating around 4.26 since Dec. 17. The high of the consolidation is 4.2755 and the low is 4.2528 (small pink rectangle).
The breakout direction for that consolidation could indicate the direction the pair is likely to move over the coming months.
A break lower from the two-week consolidation (small pink rectangle) means the price is still in the support area, but could keep falling to test the 4.23 region. A continued drop below the support area indicates a further decline to the next major support area between 4.16 and 4.13.
A short trade has the added benefit of a positive roll. The Eurozone has 0% interest rates, while Poland has an interest rate of 1.5%.
If the two-week consolidation breaks to the upside, it could be inferred that the large support area has held and the price will continue oscillating in a large range. Range resistance is 4.40 to 4.42. If the EUR/PLN rises, that is the target over the next several months.
Cory Mitchell, CMT
Stock and forex trading insights at tradethatswing.com/
Stock and forex trading insights at tradethatswing.com/