- Neutral outlook while below 1.1828
- EUR vs USD possibly develops a reversal pattern
BULLISH MOMENTUM EASED, BUT THE BIAS HIGHER REMAINED
Last week, EUR/USD hit an over two-year high of 1.1909 then retreated after, as some bulls seemed to cut back. Ultimately, a weekly candlestick closed in the green with a 1.0% gain.
Alongside that, the Relative Strength Index (RSI) remained in overbought territory emphasizing the strength of the bullish momentum.
EUR/USD daily price chart (Sep 1, 2018 — August 7, 2020) Highlighted-
EURUSD-Price-Forecast-Eyes-a-Test-of-the-Neckline-Support-Level_body_Picture_3.png
EUR/USD daily price chart (Jul10 — August 7, 2020) Highlighted-
EURUSD-Price-Forecast-Eyes-a-Test-of-the-Neckline-Support-Level_body_Picture_4.png
On August 3, EUR/USD U-turned and traded higher highlighting that bullish momentum was still in place. In the same week, the price climbed back to the current 1.1828–1.1986 trading zone and printed a new multi-month high at 1.1916.
A daily close above the high end of the current trading zone could encourage bulls to extend the rally towards the monthly resistance level at 1.2154 ( March 2018 low).
On the other hand, a daily close below the low end of the zone reflects bull’s hesitation and may guide EURUSD’s fall towards the weekly support level at 1.1639 ( Aug 2018 high).
EUR/USD four-hour price chart (July 10 — August 7, 2020)
EURUSD-Price-Forecast-Eyes-a-Test-of-the-Neckline-Support-Level_body_Picture_1.png
On Thursday, EUR/USD created the second top of a Double Top pattern. A violation of the neckline located at 1.1696 indicates a possible shift in favor bear’s control.
To conclude, while bulls still have the upper hand a break below the bullish trendline support originated from the July 10 low at 1.1254 indicates a weaker upward trend.
Therefore, a break below 1.1763 could send the EURUSD towards 1.1698, while a break above the 1.2000 thresholds may trigger a rally towards 1.2095. As such, the support and resistance levels marked on the four-hour chart should be kept in focus and that’s what the experts of Pipswin.com have predicted.
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