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Cup and Handle Pattern: EUR/USD could see some upside |
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A cup and handle formation in the forex is a technical continuation pattern. The pattern looks like its name with a rounded bottom and a small "handle." If the breakout occurs in the direction of the previous trend above the rim of the cup then the upside potential can be quite significant. A breakout in this case could push the EUR/USD to two potential profit targets. The first is the depth of the cup, which is approximately 500 pips above the "rim" or 1.6300. The second target could be established by applying a fib study to the high in April and the lowest point of the cup in May. That places the 161.8% retracement level at 1.6450, withing shouting distance of the first target. In either case, a break above the 1.5800 rim level looks like a nice opportunity to go long.
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