EURUSD is invalidating the August pattern to the upside

The EURUSD pair broke a pattern today that has been holding since early August by making a Higher High above the 4H MA50 (blue trend-line). Since The August 10 High, the pair has been trading within a Bearish Megaphone formation. The last Lower High (October 04) was rejected on the 1D MA50 (red trend-line) and as per the previous Lower Low sequences, reached the 0.618 Fibonacci retracement level from the previous Low.

However this time the subsequent rebound wasn't contained below the 4H MA50 and in fact broke even above the 0.382 Fibonacci level, which never happened in the previous two Lower Low sequences. The divergence from the previous patterns is also evident on their 4H RSI sequences. As a result the immediate target is the 4H MA200 (orange trend-line). A break above it, would target the 1D MA50, which is untouched since September 13. A break above the top (Lower Highs trend-line) of the Bearish Megaphone would in turn target the 1D MA100 (green trend-line). As we've mentioned numerous times, this is the deciding level for EURUSD between being long-term bearish and long-term bullish as it has been a Resistance since February 11 2022.

Note that if at any time, the 4H RSI is rejected on the 70.000 overbought mark, it would be a solid sell opportunity targeting the 4H MA50 again.




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