Did The Unsustainable EUR/USD Growth Come To An End?

EUR/USD has made an incredible run over the last two months. It is extremely rare to see such an increase in the forex markets. However, all things must come to an end.

Trading forex, the trend has always been much more important than any other market. And here we can observe resistance to our uptrend.

There is a confluence of three important things that I will be discussing here:

1. Horizontal Resistance
We can see a resistance block that has created a lot of friction for EUR/USD. So far there were multiple attempts around the 1.19 zone, but none of them successfully made it through

2. H&S
There is a head and shoulders pattern forming, which is another bearish sign. We are currently moving towards the right shoulder, which means that we might see a temporary increase but ultimately we expect a drop.

3. Trend Reversal
If you zoom out we can see the big orange line which shows that the trend has been going upwards consistently but now is making a turn downwards. Also the RSI shows a similar pattern (I took a larger RSI length of 30 to show that) where it now goes into a negative momentum of <50 RSI.

All of these combined give me confidence that the price will drop, and caused me to give the 'short' recommendation.

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- Trading Guru

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Disclaimer!
This post does not provide financial advice. It is for educational purposes only!