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Aug 28 - 01:55 PM

EUR/USD - COMMENT-EUR/USD Bulls Lack Conviction, Bolster Potential Bear Signal

By Christopher Romano  —  Aug 28 - 12:05 PM

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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Source:
Refinitiv IFR Research/Market Commentary

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