- EUR/USD meets weekly resistance in the 1.2200 area.
- Extra gains seen above the mid-1.2200s near-term.
The Euro is attempting to regain its footing against the US dollar after multiple bearish technical warning signs hinted that EUR/USD was about to top. For starters, a Bearish Engulfing candlestick emerged last month as prices tested the 1.2243 – 1.2266 resistance zone. Negative divergence was showing that upside momentum was fading. That can at times precede a turn lower.
Then, the pair closed under the rising trendline from late March. But, follow-through was and still appears to be lacking. Prices left behind key support at 1.2105. Resuming last month's top would entail pushing under this level. That is 1.220 critical resistance coincides with the decending trendline may maintain the dominant focus to the upside. Uptrend resumption could send prices towards December peaks, between 1.2325 and 1.2350.
Zooming in on the 4-hour chart reveals a bearish downtrend formation of successive lower lows and lower high inside a bearish channel. This is as prices are consolidating around the 1.2158 – 1.2181 zone. As such, the Euro's position seems neutral, which is a change of pace from what April and most of May entailed. Extending last month's top could expose the May 13th low at 1.1984. Under that sits the April 19th low at 1.1941.
