Fibonacci frenzy could spark EUR/USD reversal
EUR/USD has been respecting the 76.4% retracements very well of late, with yesterday seeing yet another deep retracement turn lower.
Given that we are within a wider retracement which has hit the 76.4% pullback of the referendum sell-off, we are looking out for signs of a bearish reversal from these levels. This current sell-off could provide that, with a break and hourly close below $1.1271 marking the creation of a double top formation. Below that, the $1.1241 support level is also a crucial hurdle to overcome.
However, a bearish view remains and is gradually looking more likely to come to fruition. As such, the wider picture means a bearish view is held unless we see an hourly close above $1.1428. However, on the short-term, the day’s direction is likely to be dictated by whether we see an hourly close below $1.1271 or not.