EUR/USD Technical Analysis – Squeeze Play!

It looks like a squeeze play is developing on the EUR/USD 60M charts. It is on the daily charts as well but is obviously not as pronounced.
RSI shows a definite uptrend since early May and a definite downtrend for the past week. 60M chart below. Blue line show channel resistance and green line shows channel support.

Trading Ideas: Look to sell if it makes a clean break below trend support or buy if it makes a clean break above trend resistance. Current volatility of the pair is between 20-35 on the ATR so a stop of between 30-35 should be fine, just make sure it is on the other side of the trend line (so if you bought above trend line the stop is beow) to filter out any temporary retracements.

Best time to place orders: this trade is good until it breaks out of the squeezing channel, which it has to do eventually!

UPDATE - 18:58p GMT 5-16-08 - Pair rocketed out of the squeeze trend lines for a 70 pip rise to 1.5600, below which it is currently consolidating in a pennant.

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