EUR/USD technical analysis: Bid near 1.12, stuck in a pennant pattern

EUR/USD has charted a narrowing price range or a pennant pattern over the last four trading days.
A pennant breakout would imply a continuation of the rally from recent lows near 1.1027.

Omkar Godbole FXStreet Contributor

EUR/USD is mildly bid around 1.12 at press time, but the outlook remains neutral with the pair still trapped in a pennant pattern.

Pennants are considered as continuation setups, meaning they end up accelerating the preceding move.

EUR/USD has charted a pennant pattern after having rallied from 1.1027 to 1.1250.

So, a pennant breakout on the 4-hour chart, if confirmed, will signal a resumption of 1.1027 and could yield 1.14. On the way higher, the pair may encounter resistance at 1.1286 (July 11 high).

On the other hand, a pennant breakdown would imply an end of the bounce from recent lows near 1.1027.

4-hour chart

Trend: Neutral

1. R3 1.1267
2. R2 1.1245
3. R1 1.1223
PP 1.1201
1. S1 1.1179
2. S2 1.1157
3. S3 1.1135

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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