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EUR/USD Reversal Scenario To Be Confirmed!
EUR/USD is trading in the green according to the H4 chart, a valid breakout above the near-term resistance levels will confirm a reversal on the short term. The price moves somehow sideways, showing a bullish pressure after the failure to come back to retest the 1.0653 critical support.
A larger EUR/USD upside movement could be confirmed if the USDX makes a valid breakdown below the 101.07 level. The index stands above this downside obstacle and it maintains a bullish outlook as long it stays above it.
EUR/USD has decreased a little in yesterday’s session after the false breakout above the upper median line (uml) of the descending pitchfork, above the Pivot Point (1.0857), and above the inside sliding line (SL) of the orange ascending pitchfork.
The price has decreased, but it has failed to stabilize 100% and to come back to retest the lower median line (LML) of the orange ascending pitchfork, signaling that the bulls are still strong. The reversal could be confirmed only after a valid breakout above the upper median line (uml), above the PP (1.0857) and most important above the inside sliding line (SL).
Price has developed an ascending channel after it has stabilized above 1.0653 and above 113% level, it has confirmed the lower median line (LML) as strong dynamic support. EUR/USD could increase further as long as it is located within this up channel.
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We may have a significant upside movement if the price will escape from the descending pitchfork’s body, a sharp increase will be confirmed if EUR/USD makes a valid breakout above the inside sliding parallel line (SL) of the ascending pitchfork.
So, a valid breakout above the PP (1.0857) and above the SL will validate a quickly increase towards the 61.8% level and R1 (1.1077) level. We’ll have only a temporary increase on the short term before it will drop again if EUR/USD fails to make a valid breakout above the inside sliding line (SL).
If the sliding line (SL) will be taken out, the major upside target is seen at the median line (ML) of the orange ascending pitchfork. A further increase will be invalidated if the price will drop and if it makes a valid breakdown below the lower median line (LML).
The material has been provided by InstaForex Company – www.instaforex.com
