On the daily chart below for EURUSD , we can see that the price keeps struggling extending the rally above the 1.1033 high. If the market fails again to break out here, then we may be in front of a big double top pattern with the neckline at the 1.0533 level. For now, the buyers keep being in control with the moving averages offering support.
Yesterday the US GDP showed resilience in consumer spending under the hood and the US Jobless Claims data beat expectations after several weeks of misses. This lifted treasury yields as the market repriced the interest rates cuts expected by the end of the year and boosted the USD.
EURUSD technical analysis
On the 4 hour chart below, we can see that the whole rally within the rising channel has been diverging with the MACD. This is generally a signal of a weakening momentum and it’s often followed by pullbacks or reversals.
The price is now again at the lower bound of the channel, which is the level where we will see a bounce or a breakout. Today we will have the US PCE and ECI reports. If the data beats, then we should see a breakout and a quick selloff, but if the data misses, we should get another bounce and possibly new highs.
On the 1 hour chart below, we can see that the sellers leant on the black downward trendline to push the price to the lower bound of the channel. The buyers should be waiting there to enter the market and target a breakout of the black trendline and ultimately new highs with the upper bound of the channel in focus. The sellers, on the other hand, will want to see the price to break down and jump onboard aggressively to extend the selloff.
