EUR/USD Technical Analysis: Euro May Rise But Downtrend Unbroken
EUR/USD TECHNICAL ANALYSIS: BEARISH
- Euro breaks seven-week resistance, eyes double top below 1.12 figure
- Extending higher threatens to put dominant downtrend into question
- Near-term chart setup hints upside momentum may be ebbing already
The Euro neutralized would-be bearish cues with a punch above resistance capping gains since mid-October. The double top in the 1.1176-83 area is now in view, with daily close above that casting doubt on the case for downtrend resumption signaled by the breakdown in early November.
Perhaps most worryingly for sellers, such a move would put prices within a hair of puncturing resistance guiding them lower since June 2018. The barrier is now just above the 1.12 figure, but its downward slope brings it ever-closer to the double top. If buyers take their time, both may yet fall simultaneously.
Nevertheless, the dominant trend bias remains bearish absent confirmation otherwise. Moreover, near-term positioning warns that sellers may yet retain the upper hand. Negative RSI divergence on the 4-hour chart speaks to ebbing upside momentum and may precede topping. Time will tell if it does so here.
4-hour EUR/USD chart created with TradingView
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.