Key Takeaways:
- EUR/USD is forming a double top just below a daily resistance zone.
- Could also be viewed as a right shoulder in a bearish head and shoulder pattern.
- Bias is to trade EUR/USD from the short side.
EUR/USD Technical Analysis
The last time we spoke about this pair on the blog, we had EUR/USD stuck between daily support/resistance zones as price approached one such daily zone from underneath.
But one concept of support/resistance in markets, is that all zones are in fact dynamic in their nature and in no way fixed in stone.
A prime example of which we could be seeing play out live in front of our eyes on the daily chart below.
EUR/USD Daily:
While we have always had the 1.20 resistance zone marked on our charts, you can see that I've now marked the 1.1970ish level just below.
This is now the 2nd (I've called it a double top but technically you can see that it's rejected a 3rd), time that price has been rejected here.
Yes, normally we only look to trade around daily support/resistance zones, the fact that price is forming resistance this close to our previous zone says that this is probably the more significant level at this point in time.
So with price below our new daily zone, we only want to be looking to play EUR/USD from the short side here.
Now zoom into am hourly chart and let's see if the price action can give us an opportunity to enter a low risk:high reward position.
EUR/USD Hourly:
Oh yep, that looks nice, doesn't it?
So after rejecting off daily resistance, we took the last area of short term support that when retested as resistance, gave us an entry.
While this one was a little messy with price wicking through the zone, it's obviously held as resistance and now started to move lower.
By getting on anywhere below this zone, we can keep our stops tight and try to ride bearish momentum back down.
Let's allow this one to play out.
Best of probabilities to you.
Data to Watch Next Week:
- Main Refinancing Rate (EUR)
- Monetary Policy Statement (EUR)
- ECB Press Conference (EUR)
- French Flash Services PMI (EUR)
- German Flash Manufacturing PMI (EUR)
- German Flash Services PMI (EUR)
Why not leave a comment and share a chart of your own in the comments section below? All comments that add something to the discussion will be upvoted.
This daily market analysis blog is exclusive to leofinance.io.
Posted Using LeoFinance Beta
Return from EUR/USD - Forming Double Top Just Below Daily Resistance to forexbrokr's Web3 Blog
