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.
Author
Tomasz Wisniewski
Axiory Global Ltd.
Tomasz was born in Warsaw, Poland on 25th October, 1985.
