EUR/USD is still stuck in consolidation for now, with an ascending triangle pattern forming on its 1-hour time frame.
An upside breakout could signal that the pair is headed all the way up to the previous high around 1.3400 while a downside break could mean that EUR/USD will be on its way to test the former lows around 1.2750 again.
Stochastic is in the overbought region, suggesting that a downward move might be more likely as euro bulls are running out of steam. However, the oscillator has yet to cross down before the sell signal is confirmed.
There are no major reports on deck from the euro zone today but the US will be releasing its existing home sales report. A strong figure could trigger enough dollar buying to push EUR/USD below the bottom of the triangle, but the upcoming reports for the week could be more crucial in sustaining momentum.
By Kate Curtis from Trader’s Way