EUR/USD Confirms Double Top
EUR/USD broke through a key level of support following Friday’s non-farm payrolls, confirming a double-top reversal pattern on the daily chart. With the dollar strengthening on the back of solid U.S. economic data, the pair’s recent price action signals further downside may be ahead.
A Textbook Double Top Meets Strong U.S. Data
The double top pattern on EUR/USD’s daily chart has been a textbook setup, and fundamentals have been the driving force behind it.
After retesting the August swing highs on 25th September, the pair faced heavy selling pressure as traders reacted to the ongoing strength in U.S. economic data.
The September payrolls report, showing a 240,000-job gain, was the final catalyst for the reversal, confirming that the Federal Reserve is likely to proceed cautiously with rate cuts. This triggered Friday’s break below the September lows, locking EUR/USD into a bearish outlook.
The upcoming release of inflation figures and the Federal Reserve’s meeting minutes will provide further clues about the path forward, but for now, the market’s belief in a stronger dollar is holding firm.
EUR/USD Daily Candle Chart
Past performance is not a reliable indicator of future results
Zooming In: Hourly Chart Reveals Key Levels to Watch
On the hourly chart, we see a clear downtrend formed over the past week, punctuated by Friday’s sharp break of support. Since then, EUR/USD has settled into a consolidation phase near the recent lows, bouncing between the 9-period and 21-period EMAs.
Momentum traders are closely watching for two potential setups. First, there’s the opportunity to short into a pullback toward the resistance zone created by the broken support and the descending trendline. Alternatively, a break below the current consolidation range could signal an acceleration of the downtrend.
EUR/USD Hourly Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.67% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
A Textbook Double Top Meets Strong U.S. Data
The double top pattern on EUR/USD’s daily chart has been a textbook setup, and fundamentals have been the driving force behind it.
After retesting the August swing highs on 25th September, the pair faced heavy selling pressure as traders reacted to the ongoing strength in U.S. economic data.
The September payrolls report, showing a 240,000-job gain, was the final catalyst for the reversal, confirming that the Federal Reserve is likely to proceed cautiously with rate cuts. This triggered Friday’s break below the September lows, locking EUR/USD into a bearish outlook.
The upcoming release of inflation figures and the Federal Reserve’s meeting minutes will provide further clues about the path forward, but for now, the market’s belief in a stronger dollar is holding firm.
EUR/USD Daily Candle Chart
Past performance is not a reliable indicator of future results
Zooming In: Hourly Chart Reveals Key Levels to Watch
On the hourly chart, we see a clear downtrend formed over the past week, punctuated by Friday’s sharp break of support. Since then, EUR/USD has settled into a consolidation phase near the recent lows, bouncing between the 9-period and 21-period EMAs.
Momentum traders are closely watching for two potential setups. First, there’s the opportunity to short into a pullback toward the resistance zone created by the broken support and the descending trendline. Alternatively, a break below the current consolidation range could signal an acceleration of the downtrend.
EUR/USD Hourly Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.67% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
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