EUR/USD set a seven-session high on Fed-inspired dollar weakness nL1N2FU0QN, but price action suggested bulls were treading cautiously, driving price action that could help create a significant bearish signal.
Though falling U.S. interest rates fueled broad-based U.S. dollar =USD sales, key impediments blocked the way to a deeper fall nL1N2FU0QN.
If EUR/USD bulls fail to force a break above the Aug.
18 1.1966 daily high on EBS soon, downside pressures are likely to grow.
CFTC data show that net-long euro positions have only been trimmed slightly and remain elevated.
Should EUR/USD's rally fail to extend further, reduction of long euro positions is likely, which should weigh down EUR/USD.
Daily charts show a possible head and shoulders top formation.
The right shoulder could still be forming.
The neckline sits just below 1.1750 a break of which would complete the pattern.
Completion of the pattern in combination with a break of key 1.1695/1.1710 support should drive EUR/USD longs toward the exits.
EUR/USD would then have potential to fall near 1.1450.
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