Technically, the pair has been in an overextended uptrend and is now clearly showing signs of slowing down. We could first notice the divergence, which developed into a pattern. Only the neckline still needs to break on a good momentum candle for me to be convinced to take a position. I've drawn a line for the neckline and have price alerts below that line in order for me to get notified once the price starts to move.
When you zoom out, you can see that the pair is currently also at a longer-term strong (indicated by the larger blue on top), created by multiple swing highs and demand spikes in the previous months. It has been a long time since the price has revisited this area, so a reversal is definitely possible.
This is as textbook as reversals come. Potential risks are the French election tomorrow, which might cause a rally in euro pairs. However, I believe that much of the bullishness of the euro is already priced in and euro bulls might run out of steam on the actual results of the election, only to give way to shorts who might be stepping in.
This and other setups are described on my website, where you can find my weekly forex outlook.
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