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MT5.com - EUR/USD Double Top or Temporary Retreat?

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Forex Analysis:::2020-08-06

EUR/USD Double Top or Temporary Retreat?

EUR/USD has failed to make another higher high and now it seems a little heavy. The bullish outlook is intact as long as the pair stays above the 1.18 psychological level. EUR/USD has developed a double top pattern, while the USDX a double bottom formation, but these reversal patterns are far from being confirmed.

The USD has decreased further in the short term as the ADP Non-Farm Employment Change was disappointed yesterday, the indicator was reported at 167K, versus 1200K estimates. It seems like the ISM Non-Manufacturing PMI unexpected growth has paused the USD's drop.

analytics5f2bd679bf335.jpg

EUR/USD has registered another false breakout above the R1 (1.1908) level signaling exhaustion and a minor retreat. The 1.18 level and the 250% Fibonacci line are seen as major support levels, only a drop below these obstacles and stabilization below the Pivot Point (1.1775) level will suggest selling.

Price could move sideways in the short term, it could try to accumulate more bullish energy before jumping higher.

  • EUR/USD Trading Tips

Buy a jump and close above the 1.1910 level, the next upside target could be at the R2 (1.2042) level.

A double top will be validated only by another lower low, by a drop below 1.1695 level, so this will be the signal that you can sell EUR/USD again.

Ralph Shedler
Analyst InstaForex
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