EURUSD Continuation Watch as USD loses momentum
Hi traders, this is a quick update on a developing pattern we are currently keeping our eyes on. It’s seen in two pairs, EURUSD and GBPUSD. To keep it simple, the update will concentrate on the EURUSD. However, all that’s discussed also apply to the GBPUSD as both pairs are in a very similar position.
Today we would like to see a strong close that remains above 1.0900. This could then confirm a signal bar, and we will look for a new rally tomorrow to break today’s high and establish a trigger bar. Support remains at 1.0850, and this level rejected the last test creating the tail. Buyers have some minor resistance to clear at 1.0921. A move above this area could confirm a new continuation leg higher, and we would like to see a new test of 1.0970 and or 1.0990.
If the USD makes a recovery today and we see a fade on the current bar, that could be seen as a warning sign, and it could also counter this idea if the price closes below 1.0870. A fade and move back to support cancels this out, and we would need to see new price evidence before rethinking continuation.
US CPI data will be released at 10:30 pm AEST on Wednesday and may play a role in this pattern. A miss could boost the EURUSD helping the pattern, but a beat could put pressure on the EURUSD.
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