- EUR/USD is testing bullish commitments and there are prospects of more to go to the downside.
- Bears are looking to the 1.12 figure as a target.
EUR/USD is attempting to correct higher but is facing pressure from the bears. The following is a top down analysis that arrives at a bearish conclusion while below weekly resistance.
EUR/USD weekly charts
The weekly chart above sees the price attempting to dig deeper into the demand zone although the path of least resistance could well be for a bullish correction in the coming days.
EUR/USD weekly chart
On the other hand, the outlook is bearish while below the resistance.
EUR/USD daily chart
From a daily perspective, the price is trapped between the W-formation and the M-formation's necklines. A break of their of these areas would likely encourage flow into the direction of the price action and potentially lead to a breakout one way or another. 1.1250 and 1.1303 are support and resistance. Given that the lows of the day was 1.1227, there is a bias to the downside for the upcoming sessions.
EUR/USD hourly charts
The price has formed a W-formation on the hourly time frame, as seen more clearly on a line chart as follows:
The W-formation is a reversion and bearish chart pattern. The price would be expected to move in on the neckline of the W-formation. This has a correlation with the 61.8% Fibonacci of the latest bullish hourly impulse near to 1.1245. A break there opens risk of a run towards 1.1202, or the -61.8% retracement of the recent bullish correction's range.
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