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.
Daily EUR/USD chart created with TradingView
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.
Weekly EUR/USD chart created with TradingView
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
| Change in | Longs | Shorts | OI |
| Daily | 13% | 4% | 8% |
| Weekly | -10% | 12% | 0% |
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
To contact Ilya, use the comments section below or @IlyaSpivak on Twitter
