The price of EURUSD could be forming a double bottom pattern, will it complete or is the pattern a false one?
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Recently in the FOMC meeting minutes the Federal Reserve looked to be slowing down the pace of tightening in the December meeting. This announcement alongside the slowing of inflation rates and lower PMI numbers has seen the USD weaken. This is unlikely to change unless the USD can find buyers. The USD Index currently shows the price close to the major support of 105.00. However, if buyers fail here then the USD could sink much lower.
On the other hand the ECB is planning to hike interest rates by 75 bps in their next meeting. The hawkish tone from the ECB isn’t a surprise due to the rising inflation rate in Europe. The ECB is playing catch up against other central banks as they held their interest rates lower for longer.
This could see the price of EURUSD continue to the upside unless the fundamentals change. The price of EURUSD looks to be forming a double top pattern but today’s lower range candle could be down to it being Thanksgiving in the US.
If this double pattern was to complete we would need to see the price break and close below the neckline which sits at 1.0225. This would confirm the pattern and confirm sellers have joined the market.
However, the pattern is a long way from completing and is unlikely due to the fundamentals in the market. Instead looking at the hourly time frame the price looks to be forming a bullish breakout pattern. If this bullish pattern completes we could see EURUSD trade up to the 1.0600 level.
Did you see our EURJPY Analysis? You can see it here.
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