Double Top In View For The EUR/USD

At this point, it is all systems go for the EUR/USD, but that may change very soon. Rates are approaching a daily Double Top pattern.

Written by: Dime Levov • Friday, June 21, 2019 • 1 min read

• Last updated: Friday, June 21, 2019

The Euro is sinking on weaker GDP growth forecasts

It has been a big week for the EUR/USD, rallying more than 110 pips to the daily Double Top pattern near 1.1350. For the past three days, bidders have driven rates higher in response to the FED’s 180-degree shift in policy. Given concerns over an economic slowdown, relaxed U.S. monetary policy, and the U.K. leadership picture clearing a bit, the EUR/USD has eclipsed April’s highs.

Moments ago, FOMC member Lael Brainard issued several comments toward the FED’s evolving policy toward the USD. The basic gist was more of the same: uncertainty is growing, risks are up, and rate cuts are imminent. Thus far, the comments appear to have brought more buyers to the EUR/USD.

EUR/USD Approaches Daily Double Top

One look at the daily chart pretty much sums up the situation: a dovish FED means a bullish EUR/USD.

EUR/USD, Double Top Pattern — EUR/USD, Daily Chart

As we roll into the final trading week of June, here are the levels to watch in the EUR/USD:

Resistance(1): Daily Double Top Pattern, 1.1343 – 1.1347
Support(1): Daily SMA, 1.1271
Support(2): Bollinger MP, 1.1228

Bottom Line: At this point, it is all systems go for the EUR/USD, but that may change very soon. Rates are approaching a key area of topside resistance just beneath the 1.1350 handle.

Until elected, I will have sells ready to go from the Double Top area at 1.1447. With an initial stop at 1.1376 this trade produces 25 pips on a slightly sub-1:1 risk vs reward management plan.