We noted in our weekly technical outlook report that EURUSD was stalling at resistance near 1.37, an area marked by the upper boundary of a descending triangle bearish reversal setup that has unfolded since August of last year. Current positioning seems to show a (somewhat imperfect) Breakaway candlestick formation. Most importantly, the implications of the pattern remain intact: a long bullish day is followed by a period of waning upward momentum, with the breaking point in sentiment marked a bearish reversal that engulfs the preceding range. We will enter short from here, initially targeting the previous swing bottom at 1.2886 but looking for bearish momentum to extend lower for a test of the double bottom at 1.2456. A stop-loss will be activated on a daily close above 1.3740.
