Last Friday was the largest single-session rally for EURUSD since the March 10th ECB decision. But after gaining 280 pips from Friday’s low, the single currency appears to have exhausted its resources.
The 1-hour chart below shows why I wasn’t a buyer of the pair over the last few sessions.
As noted in a previous lesson, upward sloping flags such as this don’t often bode well for those with a bullish interest. A similar pattern formed in mid-April just before the pair lost 130 pips.
Not only that but yesterday’s session formed a bearish engulfing pattern that has broken back below the 1.1360 handle. The pair managed to hold above this level briefly during Wednesday’s session but has failed to maintain it as new support.
This break re-exposes the previously mentioned 1.1217 support level. Additionally, I’m also keeping an eye on the trend line that extends from the December 2015 low.
As has been the case since October of last year, I will only entertain selling opportunities as my bearish bias for EURUSD has yet to be challenged in a meaningful way.
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