EUR/USD technical analysis: Adds 8 pips in Asia, remains trapped in a bear flag

EUR/USD remains trapped in an inverted bear flag pattern on the 4-hour chart.
A flag breakdown, if confirmed, could accelerate the drop to levels below 1.10.

Omkar Godbole FXStreet Contributor

EUR/USD picked up a bid at 1.1084 at 00:00 GMT and rose to 1.1092 a few minutes before press time. As of writing, the currency pair is trading at 1.1089.

The buyers failed to keep the pair above 1.11 for the third straight day on Wednesday. The repeated rejection above 1.11 could end up inviting stronger selling pressure.

The bearish view would strengthen if the pair drops below 1.1065, confirming an inverted flag breakdown on the 4-hour chart.

A flag breakdown is a pause that often ends up accelerating the preceding bearish move. So, a flag breakdown, if confirmed, could yield a sell-off to levels below 1.10.

A drop below 1.1065 could be seen later today if the German and Eurozone preliminary Purchasing Managers' Index prints below estimates, reinforcing the dovish European Central Bank (ECB) expectations.

4-hour chart

Trend: Bearish

Pivot points

1. R3 1.113
2. R2 1.1119
3. R1 1.1102
PP 1.1091
1. S1 1.1074
2. S2 1.1063
3. S3 1.1045

Author

Omkar Godbole

FXStreet Contributor

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

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