The EURUSD made a moderate recovery yesterday after significant bearish momentum on Thursday. As you my already know, this week my technical focuses are on the double top formation and the trendline support and it will stay that way for the upcoming week. As you can see on my daily chart below, the double top formation attempted to push below the trendline support twice, but only slipped below it, found support at 1.4820 area and can not consistently stay below the trendline to confirm the valid double top bearish reversal scenario and now back above the trendline support. Surely, it’s a hard battle in that area. We know we are in critical technical phase here, whether the double top formation will be completed and lead us towards 1.4625 and 1.4450 or the trendline support is too strong for the double top formation thus push this pair higher re-testing 1.5062 once again.
On h4 chart below, I am comparing two bearish channels which formed after price touched the peaks of the double top. The first channel was violated to the upside, hit the second peak before price moving lower and now making the second bearish channel. To complete the double top formation, the second bearish channel must remain valid as violation to the upside should be seen as potential threat to the double top scenario and trigger further bullish momentum. Key support area to be watched is 1.4850/20 area. Break below that area could be seen as valid double top formation confirmation. Initial resistance at 1.4950. Break above that area should diminish or even threat the valid double top scenario and might lead us to double top failure scenario which support bullish continuation.
Have a great weekend and see you guys next week.