Last week, as EUR/USD approached 1.13, we noted that we should look for resistance. Indeed, traders faded the EUR/USD before it could claim 1.13. Let’s follow up with this subsequent bearish attempt.
The 1H chart shows the market falling persistently this week, as price fell below the 100- and 50-hour simple moving averages, which shows some loss of the prevailing bullish bias. The 1H RSI fell to 30 which shows initiation of bearish momentum in this time-frame. However ,with price still above the 200-hour SMA, there is still some slight bullish bias.
Now, if price can hold above 1.10, this current bearish attempt would still look like a bearish correction. Now, if price breaks above 1.1175, it would look like a break above the pennant and the 100-, and 50-hour SMA. This would be a bullish continuation signal, especially if the RSI pushes above 60. Just to be safe, make sure it can clear 1.12, or else there could still be a potential head and shoulders pattern.
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