EUR/USD has tested the 1.3000 major psychological level a few times already, forming a double bottom pattern on its 1-hour time frame. However, the pair has yet to break above the neckline before confirming that a reversal is taking place.
The neckline is located at the support turned resistance area at the 1.3100 major psychological level. Stochastic is in the overbought region with a bearish divergence, suggesting that bulls still need more momentum to push the pair higher.
If that takes place, EUR/USD could have 100 more pips to rally, as the pattern is roughly 100 pips in height. There are no major reports from both euro zone and the U.S. today, but the speeches from a couple of dovish Fed officials could reduce dollar demand.
By Kate Curtis from Trader’s Way