The Euro Looks to form a Top against the Dollar

Points to consider in this euro Forex market:

• Euro is looking to form a top after failing at the trend line from December 2015.
• Need to confirm the indecisive Harami candlestick pattern.
• Trade strategy: Stand aside

The EUR/USD is looking vulnerable after failing at the rising trend line set back in December 2015. There is a bearish Harami after the euro hit a two month high against the US Dollar. This Harami, if confirmed, will be a strong signal that the rebound has run its course and the larger bearish trend is now back in play.

Euro Technical Analysis

Let’s discuss today’s euro technical analysis. There is near term support lining up at 1.1235, which is the August 2 high. A daily close below this level, confirms the Harami, and targets the next downside barrier lining up at the August 5 low. This is level is at 1.1045. The alternative EUR/USD technical analysis, notes the double top resistance lining up at `1.1415. A break above this level challenges the next upside barrier at the May 3 top. This level lines up at 1.1615.

Trade Strategy

Let’s talk about today’s trade strategy in this Forex market. A Harami by itself is not a strong indicator of a bearish reversal. We need confirmation before placing a desired short EUR sale. From a risk to reward perspective a trade right now is premature. I will opt to stand aside for a bit longer until a better trade opportunity comes along. For now, I am flat in the EUR/USD Forex market.