The EURUSD is coming off a long-standing trend line from the September 2020 low.
I previously thought the price action since late last year could be a head and shoulders. However, it’s starting to look like something else altogether.
A look at the swing highs and lows since last year shows what could be a symmetrical triangle.
Given that the pattern formed following a 1,700 pip rally, there’s a decent chance this is a continuation pattern.
That said, the EURUSD has a long way to go before bulls should celebrate.
First, the euro needs to climb above the 1.2000 area, which has been a key factor over the last few months. A daily close above that region should do.
Second, EURUSD needs to close a day above the top of this pattern up around 1.22. That could take a while considering it’s more than 300 pips above the current price.
If euro bulls can clear 1.2000 and 1.2200 over the coming weeks, it would open up 1.2350. The measured objective is a much more lofty price at 1.2900.
Alternatively, a daily close below that September trend line near 1.1760 would confirm the breakdown. It would also force a resumption of the bearish bias I had recently.
Key support below 1.1760 is 1.1600.