EUR/USD Today

As it could be expected, EUR/USD continued falling and in practice it reached the limit of the pennant that I mentioned on 9th February 2017.

At the same time the pair reached a support visible on the daily time frame and it is possible to form a double bottom there, although to be sure we have to wait for the daily bar to close. For the moment the daily bar is only 8 pips higher than the one on 15th February.

Let’s examine the situation on the smaller time frames.

On M30 time frame the pair appears oversold, RSI is below 20 and there is divergence between two lows.

On the same time frame again we can see a pair of inverted hammer bars, which are at the bottom of the move to the downside and usually they are a signal for a reversal.

The divergence, as well as the inverted hammer bars, are signals for the beginning of a correction and a move to the upside with first target at 1.0550.

Alternately, there could be a new drop toward 1.0520 – 1.0500 and a possible deepening of the divergence, i.e. a new RSI higher low compared to a lower low of the currency pair.