FOREX Chart Of The Day: EURUSD Forms Double Top
Do you trade Double Top Patterns?
The major forex pair EURUSD has formed the key pattern on the 4hr timeframe showing a potential change in trend.
But will the pattern play out?
Watch the video to learn more…
Hi, and welcome to this Blueberry Markets video update with me, John Kibbler, Head Currency Analyst.
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We’re going to go over the EUR/USD as the price has double topped on the four-hour timeframe.
So we’re just going over the daily time frame, and we can see that the price is obviously at this major resistance level. The price has reacted from this area numerous times. Recently, it just hasn’t seemed to continue to break into the downside as US dollar weakness has crept into the markets.
However, we had this rejection yesterday, almost a tweezer top candlestick pattern where the prices rejected those previous highs. Once again, closed-back within the previous candlestick range. That’s usually a good sign that we could see some further downside to the market. You know, it started off very well, but the price is pulling back at the moment.
But if we go into the four-hour timeframe, we can see that the price has actually formed a double top pattern. So, we reached these previous structure highs, we doubled topped, we’ve broken through, and we’ve closed below this neckline area. Now, I’m expecting the market to rally back up, retest that structure, and potentially reject, and go further to the downside.
We’ve also broken out of this almost channel, through here, that we saw developing on the market. That could also suggest and add a little bit of confluence that the price is going to move to the downside.
Yesterday, the Euro was weaker against quite a lot of currencies yesterday. So, that also adds a little bit of confluence to some further downside. It was pretty much down against the AUD/NZD, even GB Pound as well. Now that the price is at this resistance level, we could see that continue a little bit further.
Now, just go into the weekly timeframe as well. We had a nice bearish week last week, again we rejected this key area of resistance. We’re just seeing if we can get that further pushdown. I’m not looking to stretch for the key area that will keep the lows of 1600. Again, we’re just looking for the previous weekly low to be considered for an area of a retest. So, we’re watching this four-hour timeframe, if we do get some further pullbacks,, we’re already in a position right now. But if you’re not, and the market is pulling back into this level, you could go to the 15-minute timeframe, and look for some further opportunities short, just through here, which is looking pretty good at the moment.
So keep an eye on Euro, double topped pattern implies. Let’s see if it can play out.
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