It appears that the EURUSD pair has topped above 1.23, if we judge by the rising wedge that recently broke lower. The pattern, a bearish one, has major implications for the future price action. Most rising wedges are fully reversed, and that spells trouble for EURUSD bulls because it points to the market falling to 1.16. Moreover, almost all rising wedges retrace half of the distance they traveled, meaning that we should see minimum 1.19 in the days/week ahead.
The beauty of this trade is that it goes against consensus. Everyone expects a lower EURUSD exchange rate this year, but the market, at least so far, points to something else.
This week the CPI and Retail Sales in the United States are major drivers in the pair, as well as the pandemic’s evolution in Europe as most economies are in lockdown mode.
EURUSD Technical Analysis
To trade this rising wedge, bears may want to enter at market and place a stop loss at the highs. The next step to do is to measure the distance from the entry to the stop loss – that is the risk. Finally, project that distance twice or three times to the downside so as to build a suitable risk-reward ratio. Conservative bears may want to take profit for half a position by the time the market reaches 1.19.
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EURUSD Price Forecast
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