Last week’s close suggests a swing high has formed with a topping pattern now projecting a target to fresh, multi-year lows
The Weekly timeframe continues to bounce below the 8 week eMA, with last week’s bearish close suggesting the swing high at 1.1052 has been confirmed.
Last week’s close produced a Bearish Engulfing candle below 1.0715 support which also confirmed a double top formation on H4. Any retracements back towards this level could be considered to fade (sell into) with a stop above, to assume a re-test of the multi-year lows.
Other suggestions of continued weakness for EURUSD is seeing DAX finally follow CAC to break to new highs, whilst the futures volume for EURUSD also increased during the final days of last week, in line with the bearish trend.
The Double Top projects an approximate target around 1.038, just below the multi-year lows. If reached we will find ourselves only 380 pips above Parity.
As we approach the ECB press conference we may find movements on Euro crosses to be quite limited as traders hesitate to commit. Something to also consider is we could see volatility if liquidity remains low. Either way if we see a spike or retracement towards 1.0715 resistance then I would consider a short position to hop on board the trend.
Intraday trades may note that the near-term trend (H1 and below) continues to print lower lows and highs.