EUR/USD double top bearish reversal confirmed ahead of Powell's Senate appearance

Bullish-to-bearish trend change confirmed.
Powell likely to reiterate his positive view on the economy.
Focus on core PCE

Omkar Godbole FXStreet Contributor

The EUR/USD closed yesterday below 1.2206 confirming a double top bearish reversal. The pattern indicates the rally from the Nov. 7 low of 1.1554 has ended and suggests scope for a drop to 1.1892 (target as per the measured height method).

The break of key technical support levels suggests the move lower may accelerate while heading into the weekend if the new Fed chair reiterates his upbeat view on the US economy during the Senate appearance later today.

Also, an above-forecast US Jan core personal consumption expenditure (core PCE), due at 13:30 GMT, would add credence to Powell's confidence on inflation and yield broad-based USD rally.

EUR/USD scenarios

Hawkish Powell and an above-forecast PCE could send the EUR/USD pair would allow deeper sell-off to supports at 1.2092 (Sept. 8 high) and 1.20 (major psychological support).

Meanwhile, a weaker-than-expected core PCE could weigh over US treasury yields and the US dollar, thus helping EUR/USD revisit resistance at 1.2260 (Feb. 22 low) and 1.23 (10-day MA).

EUR/USD Technical Levels

Valeria Bednarik, Chief Analyst at Valeria Bednarik writes, "technically, the pair is bearish and hovering around the neckline of a double-top figure of around 350 pips' height, not yet confirming it, but about to, which will theoretically implicate a decline of a similar extent. Short-term, and according to the 4 hours chart, the risk leans toward the downside, given that in the 4 hours chart, the pair is developing well below a bearish 20 SMA, which accelerates below the larger ones, while technical indicators pared their declines near oversold readings, rather reflecting the latest bounce than suggesting downward exhaustion."

Support levels: 1.2200 1.2165 1.2130

Resistance levels: 1.2240 1.2275 1.2310

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Bearish	Neutral	Shrinking
1H	Bearish	Neutral	Shrinking
4H	Bearish	Oversold	Expanding
1D	Strongly Bearish	Oversold	Shrinking
1W	Bullish	Neutral	High
Updated Mar 1, 03:45 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

EUR/USD climbs to daily highs near 1.1820

EUR/USD now picks up pace and advances to the area of daily peaks north of the 1.1800 barrier at the end of the week. The pair’s decent move higher comes against the backdrop of a generalised lack of direction in the FX galaxy and the mild offered stance in the US Dollar.

GBP/USD trims losses, retests 1.3460

After briefly challenging its key 200-day SMA near 1.3440, GBP/USD now manages to regain some balance and revisit the 1.3460 zone on Friday. Cable’s pullback comes as the selling pressure on the Greenback gathers traction, reigniting some recovery in the risk-linked space.

Gold flirts with four-week highs past $5,200

Gold extends its rebound, climbing for a third consecutive session and pushing back above the $5,200 mark per troy ounce on Friday. The move higher continues to draw support from lingering geopolitical tensions and the ongoing uncertainty surrounding US trade policy, both of which are keeping safe-haven demand firmly in play.

Bitcoin, Ethereum and Ripple consolidate with short-term cautious bullish bias

Bitcoin, Ethereum and Ripple are consolidating near key technical areas on Friday, showing mild signs of stabilization after recent volatility. BTC holds above $67,000 despite mild losses so far this week, while ETH hovers around $2,000 after a rejection near its upper consolidation boundary.

Changing the game: International implications of recent tariff developments

The Supreme Court ruling on International Emergency Economic Powers Act (IEEPA) tariffs provides limited relief for the rest of the world, with weighted average tariff rates modestly lower.

Starknet unveils strkBTC, shielded Bitcoin transactions on Ethereum Layer 2

Starknet, the Ethereum Layer 2 network developed by StarkWare, today announced strkBTC, a wrapped Bitcoin asset that introduces optional shielding while preserving full DeFi composability.