EURUSD Analysis - Short-term bullish reversal
|First half of August brought us a strong drop in the value of the EURUSD. That was largely anticipated as the price was inside of the symmetric triangle and was forming a right shoulder of the H&S pattern. The price went down sharply, triggering a major long-term sell signal, after the EURUSD broke the neckline of the H&S.
Today's occasion is a counter trend trade and it seems like this is only a short-term opportunity for several pips. After a very strong decline, EURUSD is trying to rebound and the price is creating an inverse head and shoulders pattern (yellow). That can trigger us a short-term buy signal, especially that the neckline (blue) was already broken and today, successfully tested as a closest support. Despite this pattern, I do not see the chances for a bigger reversal. The price should not climb above the 50% Fibonacci and the ultimate horizontal resistance on the 1.154 (violet).
As long, as we stay below the 1.154, the sentiment in the long-term is still negative. In the short-term, buyers can be optimistic but remember that going against the trend is always more risky than with it.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.