EUR/USD: The bull run on the euro has hit the buffers [Video]

EUR/USD

With a second consecutive negative close, the bull run on the euro has hit the buffers. The question is whether the move will now begin to go into reverse, of whether it is a near term bump in the road. Technical indicators have naturally rolled over, but as yet, nothing that would be considered as an outright sell signal. For that we must look at the support around $1.1700 which seems to be developing into a potential neckline of a top pattern (potential head and shoulders top). Given the euro bounced over +60 pips off its session lows yesterday, there is a still an uncertain feel to this market now. Today’s early consolidation is not helping this either. However, momentum indicators are for now holding up, with only really a deterioration on Stochastics as the negative signal. There is an uptrend of the past three weeks that rises at $1.1650 today and the bulls are seemingly not quite ready to given up their gains. The hourly chart shows that this could be an important session for how this phase develops. As hourly RSI has unwound, a failure between 50/60 would suggest corrective momentum is building, also if hourly MACD lines fail around neutral and Stochastics bear cross. For almost two weeks of the rally, the 55 hour moving average was an excellent gauge and could now become a basis of resistance as it falls (this morning around $1.1790). A move above $1.1800 would help to improve the outlook again.