EURUSD Breaks the Bottom of Symmetrical Triangle; Is There More Downside Ahead?

EURGBP
EURGBP

EURUSD is trading slightly lower in today’s trading but its recent weakness has been enough for support at the bottom of its symmetrical triangle to break. As of this writing, the currency pair is trading roughly 25 pips below its opening price at 1.0837.

Dollar strength brought about by risk aversion sparked by rumors of North Korean leader Kim Jong Un falling ill may be the reason behind the downtick in EURUSD. However, there are a few reports due from the eurozone today that could help the currency pair recoup some of its losses or exacerbate its weakness.

At 10:00 am GMT, the German ZEW Economic Sentiment survey for April is due to be released. It is expected at -40.0 which indicates that investors are extremely lacking confidence for the economy given the current conditions. Along with it, the region-wide report will also be released with the consensus at -38.2.

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EURUSD Outlook

On the 4-hour time frame, it can be seen that EURUSD has broken to the downside of its symmetrical triangle. This chart pattern is widely considered as a neutral indicator. However, this downside break suggests that sellers could be dominating trading.

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As of this writing, the currency pair has formed a rectangle on the 1-hour chart. This means that sellers will need to push past support at previous lows, around 1.0818, in order for EURUSD to trade lower. A strong bearish close below this price could mean that the currency pair may be headed to its April 3 lows at 1.0770.

On the other hand, if there are enough buyers to push EURUSD above the top of the rectangle at 1.0896, we could see the currency pair rally to its April 15 highs at 1.0985.More content