Risk appetite is stabilizing, with most major currencies consolidating in tight ranges against one another (though the pound is showing a touch of relative weakness as my colleague Fawad Razaqzada noted early Tuesday).
Today’s relative calm gives us chance to reset the technical outlook for the world’s most widely-traded currency pair. From a longer-term perspective, EUR/USD remains in a well-defined downtrend since peaking back in September. Rates briefly dropped to an almost 2-year low near 1.1100 in late April, but bears were unable to maintain that breakdown and the unit is now consolidating within an ascending triangle pattern:
Source: TradingView, FOREX.com
As the chart shows, the key near-term resistance level to watch is near 1.1260, which has capped rates on three occasions in the last three weeks. Meanwhile, the MACD indicator remains in the middle of its bearish range, signaling consistent bearish momentum.
Looking ahead, EUR/USD’s technical setup is relatively clear: the longer-term bearish trend remains the dominant feature, favoring sell trades on any near-term bounces. At this point, it will take a break above the triangle top near 1.1260, accompanied by a corresponding breakout in the MACD indicator, to erase the market’s bearish bias.
EUR/USD Coiled For Breakout: Near-Term Bias Bearish
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.