The euro is attempting to make good on completing a bullish Falling Wedge chart formation, reversing higher form a deep corrective setback to reach a three-month high against the US Dollar. Breaking resistance marked by the June 7 swing top at 1.1348 has exposed the March 20 high at 1.1448. The seemingly more potent 1.1543-54 price inflection zone follows thereafter.The case for lasting upside follow-through looks suspect however, at least for now. Negative RSI divergence warns of ebbing upside momentum even as the pair gains ground. A look at more immediate positioning on the four-hour chart also warns against bullish exuberance. It reveals a Bearish Engulfing candlestick pattern that might prove to be indicative of a top.
This too ought to be taken with a grain of salt. The immediate uptrend defined by a series of higher highs and lows set from mid-month remains intact, so any pullback from here might be no more than a correction before further gains. On balance, opting for the sidelines seems to be most prudent until signs bearish warning signs are neutralized or downtrend resumption is reasonably confirmed.
