Credit: REUTERS/VALENTYN OGIRENKOAug 28 (Reuters) - EUR/USD set a seven-session high on Fed-inspired dollar weakness , but price action suggested bulls were treading cautiously, driving price action that could help create a significant bearish signal.
Though falling U.S. interest rates fueled broad-based U.S. dollar =USD sales, key impediments blocked the way to a deeper fall .
If EUR/USD bulls fail to force a break above the Aug. 18 1.1966 daily high on EBS soon, downside pressures are likely to grow.
CFTC data show that net-long euro positions have only been trimmed slightly and remain elevated. Should EUR/USD's rally fail to extend further, reduction of long euro positions is likely, which should weigh down EUR/USD.
Daily charts show a possible head and shoulders top formation. The right shoulder could still be forming. The neckline sits just below 1.1750 a break of which would complete the pattern.
Completion of the pattern in combination with a break of key 1.1695/1.1710 support should drive EUR/USD longs toward the exits. EUR/USD would then have potential to fall near 1.1450.
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eur/usdhttps://tmsnrt.rs/3b79hjP
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(Christopher Romano is a Reuters market analyst. The views expressed are his own)
((christopher.romano@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
