EURUSD - A long-term very possible bullish resolution.

This morning I would like to take a look at the Long-Term EURUSD chart. I can not help remain surprised by the recent relative out-performance of the Euro versus the USD. When one considers the amount and weight of negative Euro sentiment in recent months, the current level versus the USD is surprisingly strong [Currently 1.3570]. Overall it is sitting pretty much in the middle of its range for the last three years, and close to levels from mid-2007 when the pre-crash asset price bubble was hurtling towards it final spell of strength.

Looking at the long-term monthly chart, I can not help thinking that price action since the top in 2008 has unfolded in what may appear to be a pattern which typically has a strong bullish resolution. The pattern I am potentially seeing is a very large Falling Wedge pattern (Though it could also be described as a downward sloping Bull Flag.) . Last year I wrote a piece about 'Falling Wedge' patterns, which can be seen here. In that article I was referring to the mid-year wedge on the SP500 as a potential Type 2 Falling Wedge pattern, which typically has a strong bullish resolution, since then as we know the SP500 has soared. If I have correctly identified this as a potential falling wedge pattern, then I too favour it to be a Type 2 pattern. - Of course I always add that at any one time prices always have at least 2 possible paths, and it may equally be that we are unfolding in a large ranging downward channel. However, for now I will lean towards the formation of the possible Falling Wedge pattern. - In saying that, thus far it has not broken any resistance levels, which reside around 1.4000-1.4200, and a clean break over those levels will be needed to tip the odds more strongly in favour of an ultimate long-term Bullish resolution. - The chart below shows the Long-term Monthly Euro chart.

For very short-term traders, a chart on this time frame is clearly of little real use, however for slightly longer term traders, then this might be noteworthy in forming a backdrop relating to the bigger picture.