EURUSD may be forming a Double Bottom Chart Pattern.
After hitting resistance and reacting bearishly in an immediate fashion in the end of August 2018 and early September 2018, EURUSD may be ready to take a bullish move. Examining the 1 Hour and 4 Hour Charts, there are new revelations in a technical analysis sense. What are the charts telling us?
EURUSD Double Bottom Chart Pattern Forms?
The Double Bottom is present on a 1 Hour (above) and 4 Hour Chart (below). The two bottom components formed on September 4, 2018 and September 10, 2018. This Double Bottom and the exit from the pattern indicate that the pattern may end up taking place. The price would need to exceed 1.16585 to confirm that the Double Bottom Pattern is ready to be used and considered for a trade. However, the breakout off the Double Bottom could certainly be used to make profits and often is, but to formalize the pattern - 1.16585 is the resistance.
From a Supply & Demand Perspective
1.16585 still looms as a major resistance price and the short-term resistance (supply zone) as depicted on the chart below in orange was actually broken, which means that the next level of resistance (supply zone) is critical to either confirming or denying this bullish push.
In the grand scheme of things, the 4 Hour Chart makes the current resistance point look shallow and insignificant. However, breaking through that price zone that has been frequently tested and then getting to the next two zones that are fresh will pose a challenge to the bull rally, but there may be enough momentum to push it through.
The Support Zones on a 1 Hour Chart are smaller than the Resistance Zones. However, the same cannot necessarily be said about the 4 Hour Chart. The one Support Zone has a larger amount of pips to cover as opposed to the now four Resistance Zones ahead.
Relative Strength Index of EURUSD
On a 1 Hour Chart, a 14 period Relative Strength Index is inching closer to overbought territory. This would seem to time out very well with the Resistance Zone to come. On a 4 Hour Chart, the 12 period Relative Strength Index crossed the 50 Line, which provides a bullish outlook until it reaches 70 or crosses back below the 50 Line.
EURUSD Prices to Watch