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EUR/USD Price Analysis: At 1.0500, a break to the downside of an ascending triangle is imminent
The combination of an ascending triangle and an inverted flag has bolstered the greenback bulls. A declining 20-EMA at 1.0540 bolsters the bearish filters. A negative range move by the RSI (14) indicates that further weakening is imminent.
The EUR/USD pair is fluctuating between 1.0518 and 1.0531 in the early Tokyo session. Tuesday's failure to persist above the round-level resistance of 1.0600 precipitated a precipitous decline in the value of the asset.
On a larger scale, the asset is trading within an Ascending Triangle chart pattern, with a rising trendline drawn from 1.0444 and horizontal resistance drawn from the previous week's high at 1.0606. In addition, the asset is developing an Inverted Flag pattern, which indicates a consolidation period following a decline. The convergence of the Ascending Triangle and Inverted Flag patterns on the hourly chart increases the likelihood of a break to the downside.
At 1.0540, the dropping 20-period Exponential Moving Average (EMA) suggests further deterioration in the counter.
In addition, the Relative Strength Index (RSI) (14) has moved into the bearish zone between 20.00 and 40.00, enhancing downside filtering.
If the asset falls below the psychological support level of 1.0500, the dollar bulls might gain power. A recurrence of the same will drive the asset to a low of 1.0469 on June 22. A decline below the low of June 22 will expose the asset to more downside levels, including the bottom of June 17, at 1.0444.
In contrast, a significant rise over Monday's high at 1.0615 would propel the asset toward the high from May 25 at 1.0642, followed by the low from May 27 at 1.0697.
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