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  • EUR/USD charted a bullish candlestick pattern last week and is currently sitting above the 200-hour MA.
  • Daily chart indicators are flashing signs of a bullish reversal.
  • The pair may break above 1.1162, violating lower highs setup.

EUR/USD is better bid in Asia, possibly on speculation that an all-out US-China trade war would force the US Federal Reserve (Fed) to cut rates by additional 50 to 75 basis points before the year-end.

The US central bank delivered a 25 basis point rate cut last week but refrained from signaling further easing.

The EUR/USD pair is currently trading above the 200-hour moving average (MA) of 1.1124.

The pair charted a bullish hammer on Thursday and closed above that hammer candle’s high of 1.1096 on Friday, confirming a bullish reversal candlestick pattern.

That said, the pair is yet to invalidate the bearish lower highs pattern with a move above 1.1162 (July 31 high). That would confirm a bearish-to-bullish trend change.

A break above 1.1162 looks likely with the bullish divergence of the  moving average convergence divergence histogram.  

Daily chart

Trend: Bullish

Pivot points