BUZZ-COMMENT-EUR/USD bulls lack conviction, bolster potential bear signal


Aug 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.

For more click on FXBUZ



(Christopher Romano is a Reuters market analyst. The views expressed are his own)


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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