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EURUSD Forecast: Limited bullish, remains sideways and the double top scenarios

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EURUSD Forecast: Limited bullish, remains sideways and the double top scenarios
Thursday, November 12th, 2009 @ 5:09 am by Setyo Wibowo

About Setyo Wibowo:

Setyo Wibowo Living in East Java, Indonesia and holding International Relations degree, Setyo Wibowo began his forex trading career by joining Fortune Channel Investment in 2000 as a market analyst, while learning to trade forex independently on his own. Driven by his desire to share his trading experiences and ideas, Setyo joined the FX Instructor team in 2008. Setyo Wibowo is now living in Mojokerto, East Java, Indonesia.

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The EURUSD made another indecisive movement yesterday, still trapped in 1.5062 – 1.4930 range area. As you might already know, I have been paying attention on potential double top formation since the beginning of this week, as you can see in my daily chart below. Here are two double top scenarios I have in mind:

  • Valid: Double top is a bearish reversal pattern. With 1.5062/50 area considered as the peaks, failure to break above that area would trigger downside pressure, and once price break below 1.4850 the double top bearish reversal scenario is confirmed. Break below 1.4850 might also a violation to the major trendline support (blue) which potentially also trigger bearish reversal scenario.
  • Failure: A double top formation considered to be fail if price break above the peaks. I like to see it this way: A bearish reversal scenario failure usually produced the other scenario, bullish continuation with technical target remains at 1.5150 and 1.5300.

eurusddaily

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