EURUSD technical outlook: A Double Top Pattern

Do not miss the major economic event of this week held by the FED officials. The Jackson Hole Symposium will be held on Thursday and Friday. What is the EURUSD technical outlook, ahead this event?

24 August, AtoZForex – The US dollar started trading with correction against the single European currency, before the Jackson Hole Symposium on the 25th and 26th of August. This correction has been triggered by Federal Reserve Vice Chairman Stanley Fischer. He emphasized that the American economy is getting stronger and the US is close to the targets of employment and inflation.

Stanley Fischer also drew his attention to the fact that the labor market in the US was surprisingly robust, while the country’s economy since the beginning of this year has gone through a number of difficulties. His statement was interpreted by market participants as 25 basis points increase in September. They believe that Janet Yellen’s opinion will match the optimistic assessment of a condition of the American economy given by Stanley Fischer.

What about Europe?

Meanwhile, the European currency couldn’t break the resistance line at 1.1350 level. Yesterday’s data on Eurozone countries have an ambiguous effect on the euro. According to the preliminary report, the index of business activity in the manufacturing sector was 51.8 points, slightly below the forecast of 52.0 points. But the Eurozone Market Composite PMI rose to 53.1 points, exceeding analysts’ expectations. On certain regions, the picture was even less iridescent. Germany Services PMI index fell to a minimum of 3 months to 53.6 points, while the French dipped to 2 months low at 48.5 points. Based on these statistics, we may conclude that the economic growth of the Eurozone is still stable, but with no apparent support from Germany.

EURUSD technical outlook

EURUSD 4 hour chart 24.08.16 EURUSD 4-hour chart (Click to zoom in)

  • The pair is trading above 50, 100 and 200 moving averages.
  • Stochastic oscillator is in overbought zone thus give us the sell signal.
  • The MACD histogram is in the positive zone, but below its signal line, continues to decrease gradually and thus provides a sell signal.
  • RSI is in neutral zone.
  • From 4 hour chart, we can observe a double top pattern. This pattern also gives a signal to short for EUR.

Despite different signals from our main indicators, we think that the sellers will strength their positions. The first goal for bears is 1.1250 level, then after small correction, we can see 1.1200 level.

Also, do not miss the major economic event of this week held by the FED officials, which will be on Thursday and Friday. Midterm development of the EURUSD pair will depend on the result of this meeting.

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