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Is EUR/USD Bouncing Off 1.17 Again?

EUR/USD turned quite bullish by the middle of May, on the EU coronavirus recovery fund rumours. Both US and Europe reopened around the same time, but the ongoing social tensions in the US, with the protests and riots are keeping the economy from recovering in full, as well as hurting the investor sentiment.

These events have encouraged UR/USD buyers, which have been in charge since May. EUR/USD has climbed around 13 cents since bottoming at 1.0630s, moving above 1.19 twice, but failing to stay above there, or push higher. Earlier this week I thought that a double top pattern was forming on the daily chart, which would take this pair to 1.15 if the neckline at 1.17 was broken.

But, the decline stopped above 1.17 once again, which seems like a support zone has formed there. Besides that, the 20 SMA caught up with the price, adding further to the support. A doji candlestick was also formed yesterday above the 20 MA, which is a bullish reversing signal and EUR/USD bounced 140 pips higher, reaching 1.1860s. So, the double top pattern didn’t work out, since the neckline at 1.17 didn’t break, but it buyers can’t make new highs above 1.1920, then the big reversal down will come.

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Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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