Double Bottom and Short-term Momentum
The EU Session: After spending some time at the 1.4150 mark, briefly cracking it, and after completing a Gartley, a 3-wave Zig Zag, where the downswings had wave equality, the EUR-USD formed a Double Bottom.
The break above 1.4280 establishes the pattern, and the RSI breaking above 70 establishes some short-term Bullish momentum.
The US Session: there is some work for the Bulls to do to confirm the Bullish intent beyond the very short-term.
The 1.4350 mark, along with the 200-Day SMA needs to be broken.
If we see a throwback towards the Double Bottom, the market should hold above 1.4250 for clear Bullish confirmation, and the RSI has to remain above 40 to maintain Bullish momentum.
But, a clear break below 1.4250 does not completely invalidate the Bullish intent, making a higher low is enough to establish a possible wave count going up.
Looking at the 4H chart, the wave count has a completed ABC Zig Zag, and may be ready for a Bullish continuation.
A break below 1.4250 simply puts this scenario into limbo because there is always a chance for a more complex correction.
Despite all these considerations against the Bullish move, price action is suggesting that the higher probability is still a push towards 1.4450, 1.4535, and a more aggressive, swing projection target at 1.4650.
The Bullish projections should be conservative because no Bullish momentum has been established outside of the short-term.
Note: The 4H RSI never broke above 70 in our recent Bullish attempts. Before a break above 1.4550, there is still a chance that this is a "Bull Trap" for further consolidation. stay tuned...
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.