EURUSD - positive sentiment is back for good
|I guess that something would be missing if we would not analyse the EURUSD on Monday, especially when the last two weeks were pretty remarkable. Two weeks ago, the price created an inverse head ans shoulders pattern (yellow rectangle) but the real upswing happened last week, after the price defended the neckline (blue) as a closest support. We already wrote about this instrument last week. The title was: “Short-term bullish reversal”. Well, we were optimistic back than but the reality was much better for the buyers than we initially thought.
The decisive breakthrough happened on the last Tuesday, when the price broke the horizontal resistance on the 1.153 (violet area, this is the long-term neckline of the big H&S patten). After the breakout, the violet area was confirmed as a support and that set the buy signal for the following weeks (comeback from the local lows, created a false breakout pattern, which is usually a very strong sign for the movement in the opposite direction).
At the beginning of the week, we had a small reversal, caused by the mid-term down trendline (orange). Second part of the day, brings us a weakness of the USD and another bullish attempt. In my opinion, that resistance should be eventually broken. Maybe not today but definitely in the nearest future. This should allow us to see the EURUSD much higher.
Tomasz Wisniewski
Chief Analyst Alpari Research & Analysis Ltd (UK)
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