FxWirePro: Can EUR/USD Consolidation Phase Breakout Channel Resistance As Bulls Likely To Prolong On Double Bottom Pattern?

EURUSD bullish price action appears to be gaining renewed momentum as it is edging higher towards 1.1825 levels.

Technically, the bulls seem to be shrugging-off channel resistance (refer monthly chart), but the minor uptrend driven by double bottom pattern is most likely to extend further, although you could see some minor dips on overbought pressures signalled by the stochastic curves.

Currently, the bulls are hovering at 7-DMAs and beaming up with double bottom pattern with bottom 1 at 1.1695 and bottom 2 at 1.1712 levels (refer daily chart).

Any breakout above 7-DMAs and channel resistance, more rallies likely with minor corrections are possible as both leading & lagging oscillators are in tandem with the uptrend.

On a broader perspective, as you could observe the major downtrend has been travelling through descending channel, the rally from 1.0635 is approaching an important juncture around 1.19 levels. This is still expected to define the top of a medium-term range. However, a clear break of this region would suggest potential for a return to the 1.20-1.25 region again.  

Trade tips: At spot reference: 1.1824 levels (while articulating), contemplating above technical rationale, one can execute one-touch call options strategy. Such exotic option with upper strikes at 1.1875 levels, the strategy is likely to fetch exponential yields than the spot moves upwards.

Alternatively, we recommend long hedges of August tenors as we could foresee further upside risks in the days to come while the pandemic and macroeconomic turmoil still remains intact.