- EUR/USD is on the defensive, having charted a bearish lower high above 1.12.
- The pair risks falling back to the Aug. 1 low of 1.1027.
EUR/USD is looking south, having carved out a bearish lower high near 1.1250 over the last few days.
The currency pair picked up a bid at 1.1027 on Aug. 1 and jumped to 1.12 on Aug. 5. In the six trading days to Aug. 13, the pair repeatedly faced rejection above 1.1230 and ended up charting a small knot of congestion that looked like a bull flag pattern, a continuation pattern.
A breakout would have opened the doors for levels above 1.14 (flag breakout target as per the measured move method).
The pair, however, fell to 1.1131 on Wednesday, confirming a downside break of the flag.
Essentially, the bounce from the Aug. 1 low of 1.1027 has ended up charting a bearish lower high. Put simply, the recovery rally has ended and the bears seem to have regained control. So, a fall back to 1.1027 could be in the offing.
As of writing, the pair is trading at 1.1144, having hit a low of 1.1133 earlier today. The outlook would turn bullish if and when the pair prints a daily close above 1.1250, invalidating the bearish lower highs pattern.
- R3 1.1238
- R2 1.1214
- R1 1.1176
- PP 1.1154
- S1 1.1116
- S2 1.1092
- S3 1.1054
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