EURUSD has been on the rally since July 2020, causing it to break from the downtrend channel. The bullish momentum is close to reaching to its end as a D1 H&S pattern has formed. As of now, I strongly do not recommend taking any action as of yet until either the neckline or the shoulderline breaks. If the former breaks, sell, if the latter breaks, buy.
If the neckline breaks, bearish momentum will carry it towards 1.185 in the coming weeks whereas if the shoulder line breaks, it will invalidate the H&S pattern which means that the bulls will continue to push the price higher. For now, my sentiments remain bearish as on the higher timeframes, the RSI is relatively close to overbought. A pullback towards 1.185 before further up would be ideal for greater highs in the future after the US stimulus bill is approved.
If the neckline breaks, bearish momentum will carry it towards 1.185 in the coming weeks whereas if the shoulder line breaks, it will invalidate the H&S pattern which means that the bulls will continue to push the price higher. For now, my sentiments remain bearish as on the higher timeframes, the RSI is relatively close to overbought. A pullback towards 1.185 before further up would be ideal for greater highs in the future after the US stimulus bill is approved.