EUR/USD is well known for its volatility and mercurial behavior, which is not hard to explain with the fact that it is one of the most popular to trade currency pairs and it’s influenced by all sorts of contradictory financial interests. The bulls and bears are in a constant conflict and that struggle for dominance never ends.
So it is very logical that for the past seven days (from 22nd February to 2nd March 2017) the pair moved from 1.04934 to 1.06304 and back to 1.04985 while being range-bound, forming a double bottom but without reaching a lower low.
The divergence on the daily time frame (in red) still hasn’t reached its limit, but we do know that things often happen slowly with this pair.
It is quite possible for it to drop further and to form a double bottom on the weekly time frame, and only then to start moving to the upside, i.e. to fall to 1.0350 and then to begin rising toward 1.09 – 1.11.
In the alternate scenario EUR/USD will renew its impulse move to the downside that began on 1st May 2014, which technically could lead the pair way below parity. That, of course, is a very long-term prognosis which we should still keep in mind just in case.
It could have found some support.
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