E Renko Price Action Of EURUSD, Gold, USDJPY And The Dollar Index

The EURUSD looks somewhat weaker to the downside, while USDJPY and the Dollar index remain non-committal to a trend. On the other hand we have gold, which is setting up into a bullish move. But will things change as we head into the end of the second quarter of 2021? There are a lot of economic events lined up in the latter part of the week.

Read the detailed summary and also key factors to watch in the markets this week.

EURUSD Outlook: Will the bearish pennant trigger further downside?

EURUSD Technical Analysis Using Renko Price Action
EURUSD Technical Analysis Using Renko Price Action

The EURUSD chart is quite clear, in that we notice a sharp decline in prices after the euro lost the 1.211 – 1.2100 handle. The question is whether there will be a follow through to this price action.

If the EURUSD moves as expected, we could see further declines in the making, with the still nascent downtrend firmly taking shape.

Following this break down of the 1.211 – 1.210, the sharp decline saw prices hitting a bottom at 1.186.

We now see a consolidation taking shape.

Price action in the EURUSD has been making gradual higher highs and higher lows. Yet, the shape of the consolidation is similar to a bearish pennant pattern. (A bearish pennant pattern is a temporary consolidation in a downtrend. Obviously, depending on the direction of the breakout, the pattern is validated.)

Given the current EURUSD price action, we need to see evidence of prices moving lower. We already notice price closing out slightly lower on Friday, June 25, 2021. But a continuation to the downside is required to confirm this view on the EURUSD.

The initial downside will be seen at the 1.1860 handle. And a successful breakout below this low will put the minimum downside in the EURUSD to 1.1687. But we expect prices to stall after reaching 1.1710.

Invalidating this bearish view will be a move above 1.1967. A firm close above this level will clearly invalidate the bearish pennant pattern. This will in turn set the stage for a retracement to the downtrend.

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Disclaimer: The views and opinions expressed in this article are not to be considered as investment advice. The technical outlook article is only for educational purposes.

Disclosure: I/We do ...

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