Euro vs US Dollar Technical Outlook
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) Zoomed Out
![](https://a.c-dn.net/b/32S9sL/EURUSD-Price-Forecast-Eyes-a-Test-of-the-Neckline-Support-Level_body_Picture_3.png)
![](https://a.c-dn.net/b/0YPMDo/logo-stripe.png)
![EUR Forecast](https://a.c-dn.net/b/0Hz4RK/500x707Forecast-EUR.png)
![EUR Forecast](https://a.c-dn.net/b/0Hz4RK/500x707Forecast-EUR.png)
EUR/USD DAILY PRICE CHART (July 10 – August 7, 2020) Zoomed IN
![EURUSD](https://a.c-dn.net/b/1ofKCJ/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).
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![Traits of Successful Traders](https://a.c-dn.net/b/3dOmbj/500x707Beginner-TraitsofSuccessfulTraders.png)
EUR/USD Four-Hour PRICE CHART (July 10 – August 7, 2020)
![EURUSD Four hour price chart](https://a.c-dn.net/b/2BhfKh/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 threshold 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.
Written By: Mahmoud Alkudsi, Market Analyst
Please feel free to contact me on Twitter: @Malkudsi