EUR/USD Price Analysis: A downside break of an ascending triangle looks imminent at 1.0500
- The confluence of the Ascending Triangle formation and Inverted Flag has strengthened the greenback bulls.
- Declining 20-EMA at 1.0540 adds to the downside filters.
- A bearish range shift by the RSI (14) is indicating more weakness ahead.
The EUR/USD pair is juggling in a minor range of 1.0518-1.0531 in the early Tokyo session. Earlier, the asset witnessed a steep fall after failing to sustain above the round-level resistance of 1.0600 on Tuesday.
On a broader note, the asset is auctioning in an Ascending Triangle chart pattern whose upward sloping trendline is placed from 1.0444 while the horizontal resistance is plotted from the previous week’s high at 1.0606. Also, the asset is forming an Inverted Flag pattern that signals a consolidation phase after a downside move. The confluence of the Ascending Triangle formation and Inverted Flag on the hourly scale is bolstering the odds of a downside break of the asset.
The declining 20-period Exponential Moving Average (EMA) at 1.0540 is indicting more weakness in the counter.
Also, the Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-40.00, which adds to the downside filters.
The greenback bulls could strengthen further if the asset drops below the psychological support of 1.0500. An occurrence of the same will drag the asset towards June 22 low at 1.0469. A slippage below June 22 low will expose the asset to more downside levels for the June 17 low at 1.0444.
On the flip side, a decisive move above Monday’s high at 1.0615 will drive the asset towards May 25 high at 1.0642, followed by May 27 low at 1.0697.
EUR/USD hourly chart
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Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
