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EUR/USD - ST Bulls Remain in Charge

EUR/USD has been bearish but is bullish this week after it bounced off the 1.0806 support pivot. The 1H chart shows the market push price above the 200- 100-, and 50-period simple moving averages, and the RSI has held above 40 after tagging above 70.

EUR/USD 1H Chart 7/24
(click to enlarge)

The 1H chart also shows that after rebounding to 1.1018, price action appears to have formed a double top. However, after the double top was formed, price was unable to extend much lower before it stalled at a rising trendline. After a brief period of consolidation, the EUR/USD rebounded, despite weaker-than-expected manufacturing and services PMI data throughout key countries in the European Union. 

The fact that price bounced off the rising trendline and he cluster of moving averages suggests that bulls are in control at least in the short-term time-frame represented by the 1H chart. 

EUR/USD 4H chart 7/24(click to enlarge)

If we indeed go with the bullish outlook in the 1H chart, we should be cautious because of the prevailing downtrend. As we can see in the 4H chart, a falling trendline would challenge this week's bullish price action around 1.1050. A break above 1.11 and we should probably start reconsidering the bearish continuation scenario. Otherwise the market should still be bearish, and sellers might find this week's rally as an opportunity to get in. 

Now, if price fails to rise above this week's high and falls below 1.09, we might want to consider the bearish continuation outlook with focus on the 1.08 handle going into next week. 

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