Yahoo Finance False breakout on the EURUSD means a bearish correction
Seems like another correction have finally arrived for the American Dollar. USD had a positive start of the month but during first four days of the last week, this positive sentiment got entirely wiped out from the charts. Hope for the Dollar bulls came back on Friday. As for now, it looks like the bullish movement can be sustainable, at least in the short term.
Fundamentally we are expecting a quiet week. Usually, when the calendar is empty like this, attention shifts towards the politics or we are completely ignoring the news and just go with the flow (trend, technical analysis).
Technically, EURUSD draws a false breakout pattern (grey) above the resistance on 1.252 (orange). False breakouts usually create a movement in the opposite direction, so according to this, we should go south. Potential target for this is the black up-trend line, which is connecting higher lows since the middle of December. That makes it an interesting swing trading opportunity where on the stake we have 120 pips. Negative sentiment will be denied once the price will come back above the orange area, which for now seems less likely.
This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis
This article was originally posted on FX Empire
