As we mentioned in the previous forex updates today, the Eurozone economy is going through a really rough patch as the economic data has shown in Q2 2018. While the ECB expects the economy to recover, we have only seen economic numbers deteriorate further as we head into the new year.

Yet, EUR/USD has traded in an ascending channel during the last few months. This pair bottomed out at the beginning of November above 1.12 and although it hasn’t exactly turned bullish, EUR/USD has been making higher lows and higher highs since then, which shows that it has formed an upward channel.

The bottom line of this channel was broken this week as EUR/USD bottomed at 1.1257 yesterday. The price reversed up yesterday and reached 1.1340 as the USD got sold off, but it seems like the bottom of the channel has turned into resistance for EUR/USD now. So, the area around 1.1340-50 might be a good place to look for small shorts, targeting 50-80 pips, if you are thinking of trading this pair.