EUR/USD Short-term Technical analysis
Analysing the daily chart of EUR/USD it is clear that the pair is moving in a downtrend. We observe the formation of a bearish failure swing reversal pattern which occurred between June 18 and July 10.
The first top (A) was formed on June 18 with high price at 1.14351. A bottom (B) followed on July 7, with low price at 1.09151, which was again followed by a second top (C) on July 10, with the high price 1.12150 being lower than the previous top (C < A).
We then observed a downward movement, breaking the bottom of the swing (B) and continuing until Friday, July 17, when the price closed at 1.0817. Since we see a break and a close of a candlestick below level B, indicating that the bearish reversal pattern is confirmed, the price is more likely going to move further down.
Target can be set simply
vertical distance from point A to point B.
We then use that distance as a target from the break point of level B and further down, to see that the price is likely to reach the level around 1.0395.
Fibonacci levels also confirm our target setting. By using Fibonacci measurement from point B to point C, we get the first target (161.80) around 1.0730. The second Fibonacci target (261.80) is around 1.0430, close to our swing target, indicating that over the next few days, the EUR/USD currency pair is more likely going to move further down to 1.0730 and if that level breaks, the price might reach the area of 1.0395 – 1.0430.