Final Leg of Diagonal Pattern - 1.1050 Key Level

With the Fed beating the drum of rate increases, many are looking for the Greenback to fundamentally strengthen. Though when and if the Fed actually increases rates is a debate for another day, let's look at the technical picture for EURUSD.

It appears we are finalizing the 4th wave of a 5 wave diagonal pattern. We're looking for this 4th wave to terminate in the 1.1050-1.1200 price zone, then pivot higher to for a 1.17 retest. Two items can help with the long trigger:

1. Live trader positioning through FXCM - it currently reads +1.01...look for this number to drop to signal a bullish signal

2. A break above the red resistance trend line would signal the mood of the market could be shifting towards bulls.

If this occurs, one could place a stop loss just below the recent swing low while targeting 1.16 for a positive risk to reward ratio.

If prices meaningful penetrate 1.1050, then we'll need to consider the alternate patterns.

Best of luck and happy trading!