Contrary to trade patterns theory, the currency rate did not make a breakout from the falling wedge formation to the north. Moreover, the safe haven Yen was quoted higher despite release of disappointing trade data. For this reason, the fall of the rate was most likely based on worries about vote for the new tax reform and Merkel’s failure to form a new government. On the one hand, the fact that the monthly S1 located at the 112.04 level sustained under such heavy pressure indicates on an upcoming recovery of the buck, which will tend to reach the 112.62 mark. This scenario is partially supported by the aggregate market sentiment, which is 59% bullish. On the other hand, the falling moving averages are likely to continue pushing the pair to the bottom in the nearest future.
