EUR/USD technical analysis: Snaps four-day winning run, but bull breakout still valid

EUR/USD's four-day winning streak ended on Tuesday.
The inverse head-and-shoulders breakout is still valid.
The bullish case would weaken below 1.1344.

Omkar Godbole FXStreet Contributor

EUR/USD fell 0.28 percent on Tuesday, engulfing Monday's high and low and ending the four-day winning streak.

The currency pair, however, defended the former resistance-turned-support of the 200-day moving average (MA), which was located at 1.1355 on Tuesday. Interestingly, the neckline of the inverse head-and-shoulders pattern breached was also seen at 1.1355 yesterday.

Put simply, the bullish outlook put forward by an upside break of the 200-day MA and the inverse head-and-shoulders breakout on Friday is still valid. Supporting the bullish case is the fact that the 5-day moving average has crossed above the 200-day MA for the first time since May 2018.

The case for a rally to 1.16 would further strengthen if the pair bolsters the bullish setup with a close above Tuesday's high of 1.1412.

The outlook, however, would turn bearish if the pair finds acceptance below 1.1344 – the low of Tuesday's bearish outside day candle. As of writing, the pair is trading at 1.1361.

Daily chart

Trend: Bullish

Pivot points

1. R3 1.1477
2. R2 1.1446
3. R1 1.1407
PP 1.1375
1. S1 1.1336
2. S2 1.1305
3. S3 1.1266

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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