- EUR/USD remains below key support-turned-resistance of 1.1162.
- A flag breakdown on the 4-hour chart, if confirmed, would open the doors to levels below 1.10.
EUR/USD gained 0.19% on Wednesday, snapping a five-day losing streak, however, the outlook remains bearish as the pair is trading well below the former support-turned-resistance of 1.1162 (Aug. 12 low).
Further, the pair seems to have created a bear flag pattern on the 4-hour chart. A bear flag is a pause that usually ends up accelerating the preceding sell-off.
A break below 1.1065 would confirm a flag breakdown and create room for a drop to 1.09 (target as per the measured move method).
As of writing, the pair is trading at 1.1093. A 4-hour close above 1.1104 would invalidate the flag pattern. That said, a break above 1.1162 to invalidate the bearish put forward by the range breakdown on Aug. 14.