The exit of the EUR/USD from its pennant will set the tempo
From a technical analysis perspective, the EUR/USD is consolidating inside a short-term symmetric triangle, known as a “pennant” in technical analysis parlance. The output of this figure and the Bollinger bands of the 4 hour time unit will indicate the next course of action.
A breakout above would pave the way for a bounce in EUR/USD that could extend to former support at $1.07576 while a breakout down would pave the way for further strength. fall of the euro to its lowest point in the last twenty years reached in 2017 at $1.0340.
The risk/reward ratio looks rather on the downside as overly hawkish rhetoric from the Fed would naturally strengthen the dollar and underhawkish rhetoric could be due to fears over the economy, which would strengthen the dollar. risk aversion and would also support the dollar.
- Buy above $1.0570
- Sell below $1.0480
- $1.0760 (Buy)
- $1.0340 (Sell)
Risk/reward ratio: >2
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