EURUSD Eyes December Highs as US Protests Weaken the US Dollar

EURUSD finished yesterday’s trading higher as riots across the US weighed down the US dollar. The currency pair was up by 0.28% when it closed at 1.1135. As of this writing, EURUSD is trading slightly lower by 0.08% at 1.1126.

Protests on the Black Lives Matter movement have gotten violent in some US cities. With this, US President Donald Trump threatened to impose Martial Law. He remarked that he may send active US military personnel to US cities in an attempt to minimize riots. Consequently, this did not sit well with investors who worry about political instability.

There are no market-moving reports due for release later today which could mean that this news may continue to dictate the direction on EURUSD.

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EURUSD Outlook

On the 1-hour time frame, it can be seen that EURUSD has recently made lower highs after a series of higher highs. Consequently, a head and shoulders chart pattern has formed. When you enroll in our free forex trading course, you will learn that this is considered as a bearish reversal indicator.

As of this writing, the currency pair is still trading above its neckline support which is around 1.1115. A strong close below this level is needed in order for EURUSD to trade lower. Should this happen, we could soon see the currency pair fall to 1.1026 where it may test its May 27 and May 28 highs.

On the other hand, a bullish close above yesterday’s New York session highs at 1.1140 could invalidate the head and shoulders pattern. This price action could indicate that there are still buyers in the market that could push EURUSD to new multi-month highs. The next near-term resistance for the currency pair would be at 1.1238 where it topped in December.

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