EUR/USD Technical Analysis: Euro Pop Failing at Range Top?
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EUR/USD TECHNICAL ANALYSIS: BEARISH
- Euro surges to 4-month high but struggles to break range top
- Negative RSI divergence hints rally may reverse course soon
- Reversal confirmation needs break of 2-week trend support
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The Euro is testing the top of the range confining price action since mid-October in the 1.1176-83 area. A break higher confirmed on a daily closing basis may set the stage for a push beyond the 1.13 figure, with a minor barrier at 1.1348 lining up thereafter on route to the late June high of 1.1412.
Immediate support is marked by a rising trend line connecting swing lows defining the upswing from the October 29 low, now at 1.1094. A reversal back below that opens the door for another challenge of support in the 1.0968-90 congestion area.
Daily EUR/USD chart created with TradingView
Near-term positioning suggests the upside foray may be repelled. The four-hour chart shows EUR/USD stalling at double top resistance as negative RSI divergence points to ebbing upside momentum. That might be laying the groundwork for a reversal downward.
Any weakness that follows from here will need to conclusively clear two-week uptrend support to make a convincing case for bearish follow-through, even in the near term. The long side seems no more attractive however – at least for now – as prices’ proximity to resistance speaks to adverse risk/reward parameters.
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.