EURUSD forming a bullish pennant pattern

EURUSD has made an impressive bounce from 1.10 to 1.12 and is now forming a bullish pennant pattern. A break out above 1.1250 would give us 1.1330-1.1350 as the first target area to watch out for.

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Purple lines - pennant pattern

EURUSD despite making new lows at the start of August, last week was a large scale bounce as we expected given the warnings from the bullish RSI divergence signs. Now that price is 200 pips higher from its lows we see a bullish pennant formation. Resistance is at 1.1250 and support at 1.1165. Keep a close eye on these two levels as a break of either will point the direction of the move we should expect to see next. The most probable scenario is the bullish break out as the longer-term technical picture of EURUSD favors a longer-term bullish reversal from the current levels.

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