EUR/USD Double Top Needs Confirmation!!!|KOL Analysis•Olimpiu Tuns

EUR/USD has developed a reversal pattern on the Daily chart, but only another lower low will really validate this formation and a potential reversal. The rate is traded at 1.1742, the next downside target is represented by 1.1695 - 1.1700 area.

The dollar has taken the lead in the short term as the US Dollar Index has managed to rebound in the short term. The index has printed a potential double bottom pattern, this pattern needs confirmation as well.

The US PPI is expected to grow by 0.3% in July, while the Core PPI could increase by 0.1%, better than expected figures could help the USD to drag EUR/USD lower. On the other hand, Euro-zone ZEW Economic Sentiment is expected to drop from 59.6 points to 55.3 points in August, while the German ZEW Economic Sentiment could drop as well, from 59.3 to 57.0.

● USDX In Range

The index moves in range according to the Daily chart, another higher high, a jump above the 93.99 high will signal further growth and EUR/USD decline. Still, the pressure is still high as long as it stays below the upside 50% Fibonacci line, a valid breakout above this line will signal a stronger dollar.

USDX has failed to approach the median line (ML) of the descending pitchfork in the last attempts, so a rally towards the upper median line (UML) is somehow expected. An upside breakout from this minor range will suggest that the downside movement is complete and that the index will come back higher.

Though, another lower low, drop below 92.52 will invalidate the bullish scenario, reversal, and will signal a USDs depreciation.

● EUR/USD Bearish Engulfing Confirmed!

EUR/USD is trading in the red and it could extend the current sell-off. The 1.1695 level is seen as critical static support, another lower low will validate the Double Top pattern and will suggest a drop towards the first warning line (WL1) or lower towards the 1.1495 level.

Yesterday‘s drop has validated Friday’s bearish engulfing reversal pattern, so the selling pressure is high in the short term. As Ive said yesterday, EUR/USD will resume its upside movement if the price will climb again and consolidate above the 1.18 level.

● USD/CAD Reversal In Focus!

USD/CAD has finally managed to get back above the downtrend line, now it has retested the broken line and it could try to jump higher if the USDX will resume its rebound. The pair stands right below 1.3356 level, I believe that a valid breakout above the Pivot Point (1.3460) will really validate a leg higher, reversal.

So, another higher high will bring a long opportunity on USD/CAD, the first upside target is seen at the median line (ML) of the ascending pitchfork. The support remains at the S1 (1.3275) level and at the lower median line (LML) of the ascending pitchfork, a drop below these near-term obstacles will invalidate the reversal and will suggest selling again.

{About the Author}

Olimpiu Tuns is a seasoned market analyst / trader / trainer on the financial markets with expertise in forex, cryptocurrencies, commodities, futures, options, index, CFD for more than 8 years. He is also a famous blogger in both technical and fundamental analysis, trading signals, trade setups, etc.

He has worked as a Market Analyst / Consultant for three major Brokerage companies, Admiral Markets, MultiBank Exchange Group and InstaForex (live webinars, market analysis, educational materials, video analysis, video tutorials, ghostwriting, content creator), as a Social Media Manager and as a Financial Markets & Crypto Analyst / Contributor for very important news portals/blogs (investing.com, benzinga.com, forexalchemy.com actionforex.com, countingpips.com), websites, educational platforms (Forex.Academy, Forex.Today), independent clients, etc.

Olimpiu Tuns currently works as a Financial Markets & Crypto Analyst / Signal Provider / Trader / Trainer.

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