EUR/USD Sell-Off Favored!

EUR/USD is traded near a strong resistance area, so a sell-off could appear soon. The price action has a printed bearish engulfing which is seen as a reversal pattern.

As you already know, the USD was into a corrective phase versus its rivals as the USDX retreated a little. Though, the US Dollar Index maintains a bullish outlook. USDX’s increase could force EUR/USD to drop again.

EUR/USD H1 Technical Analysis

EUR/USD registered a false breakout with great separation above 38.2% and a bearish engulfing on the weekly R3 (1.1891). All these have signaled that the bulls are exhausted and that the bears could take control.

It has found resistance at the upper median line (uml) and now is traded below the median line (ml). Dropping and stabilizing below the immediate lows could validate a new sell-off.

Conclusion!

EUR/USD found strong resistance at the weekly R3 (1.1891) showing exhaustion. It has printed also a minor Head and Shoulders pattern. A new lower low could bring a bearish momentum.

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