The EURUSD appears to be in the final stages of topping.
Last week’s failure to reclaim the 1.1940 resistance area was the first sign that buyers were struggling.
Thursday’s pin bar looked promising, although its location on the chart wasn’t ideal.
Fast forward to today, and sellers are starting to take over once more.
The lower highs since September 1st hint at weakness, even though the 1.1700 area is still holding as support.
It’s going to take a daily close below 1.1700 to open up lower levels.
One such lower level is 1.1600, followed by 1.1500.
The latter is the top of the multi-year wedge I’ve discussed for months.
So, even though the EURUSD could lose another 150 to 250 pips from today’s price, the bigger picture is still bullish.
Of course, that could change, but I have to stay cautiously bullish as long as the EURUSD stays above the 1.1500 region.
However, a move below 1.1695 in September could carve a bearish engulfing month.
But as always, the monthly close will be key.
With all of this in mind, I’ll be on the sideline waiting to see what kind of chart pattern develops from this pullback.
Something constructive such as a bull flag could produce a buying opportunity, but not until a retest of at least 1.1600, maybe 1.1500.