EUR/USD nears narrowing end of rising wedge

THE most traded currency pairs in the world are "the Majors" and EURUSD leads the group as the currency pair represents two of the world's largest economies. In March 2020, the pair staged a reversal after a long descending trend since 2018. After the bottom level around 1.0675 was hit, a rising wedge pattern that extends till date was formed.

The pattern can be identified by its narrowing trading range across a period of time, where the pattern opens wide in the beginning at the bottom and contracts as prices move higher. The rising wedge is a bearish pattern and may signal a reversal in prices.

Within the largest formation, we can spot a micro ascending channel between December 2020 till early January 2021. The channel spanned a width of approximately 135 pips. The ascending channel could be identified by its higher highs and higher lows in the price pattern. An upper channel line is constructed by connecting highs while the lower trend line connects the lows. Within the ascending channel, the parallel upper and lower trend lines show the area of support and resistance.