- EUR/USD has broken below a key trendline and might have formed a bearish pattern.
- A Double Top reversal pattern could potentially be a bad omen for the pair.
EUR/USD breaks below the trendline for the rally since June. On Tuesday it executes a throwback move to “air kiss the trendline goodbye” and now seems to be declining again.
The overall tenor of the chart suggests a bearish short-term outlook. Momentum as measured by the Moving Average Convergence Divergence (MACD) is in negative territory. If prices can close below Friday’s low at 1.0951 the break will be confirmed and a deeper decline is likely to unfold.
EUR/USD Daily Chart
A confirmed break of the trendline would likely lead to a deeper sell-off. Such a move might reach a target at 1.0865 initially (the 61.8% Fibonacci (Fib) extrapolation of the move prior to the trendline break). The 200-day Simple Moving Average (SMA), however, could come in with support a little before then at 1.0875, suggesting another more conservative option.
Adding to the bearish picture is the possible Double Top price pattern which might have formed during September. This is the “M” shaped pattern formed just under the heavy resistance line at 1.1226. Double Tops are signals that the uptrend has reached its conclusion and price is reversing. The pattern's "neckline" at 1.1001 has already been broken, confirming activation of the pattern’s downside target at 1.0858, the 61.8% Fib extrapolation of the height of the pattern lower.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD struggles to recover above 1.1000 ahead of Fedspeak
EUR/USD holds ground on upbeat German Industrial Production data on Tuesday but finds it difficult to clear the 1.1000 hurdle. In the absence of high-tier macroeconomic data releases from the US, investors will pay close attention to comments from central bankers.
GBP/USD holds steady near 1.3100 as mood sours
GBP/USD trades in a tight channel at around 1.3100 following Monday's decline. The negative shift seen in risk mood doesn't allow the pair to gather recovery momentum as investors await comments from Federal Reserve policymakers.
Gold drops to three-week lows and challenges $2,600
Gold prices now accelerates its decline and revisit levels last seen in late September around the $2,600 mark per ounce troy on the back of further repricing of a smaller rate cut by the Fed in November and rising caution prior to the release of the FOMC Minutes on Wednesday.
Bitcoin eyes for $66,000 mark as ETF records inflows on Monday
Bitcoin (BTC) hovers slightly above $62,000 on Tuesday after a minor decline on Monday, buoyed by positive signs such as over $233 million in inflows into US Spot BTC Exchange Traded Funds (ETFs).
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.