EUR/USD Analysis: Double Bottom Breakout May Remain Elusive

• The EUR/USD pair looks set to test 1.1852 (double bottom neckline), the daily chart indicates.
• However, a convincing double bottom breakout may remain elusive in short-run as the weekly chart is still biased to the bears, as indicated by moving averages.

The common currency rose to 1.1721 in Asia - the highest level since June 14 and will likely extend the recovery from the recent low of 1.1508 to 1.1852 (Dobule bottom neckline), the daily chart indicates.

Daily chart

The bullish price-relative strength index (RSI) indicates the tide has turned in favor of the bulls for now. The spot has found acceptance above 50-candle moving average (MA) and 100-candle MA on 4-hour chart. The 200-candle MA has shed bearish bias (flatlined).

Meanwhile, the major MAs on the hourly chart - 50,100, and 200 - are trending north in favor of the bulls.

So, the currency pair looks set to test 1.1852 (ECB day high and also double bottom neckline).

A daily close above the neckline would confirm a bullish reversal - meaning the sell-off from 1.2414 has ended and the bulls have taken over.

However, a convincing double bottom breakout may not happen in the short-term as the 50-day moving average is still trending south and is currently located at 1.1839. Further, the 38.2 Fibonacci retracement hurdle of the April 17 high - June 21 low is located at 1.1854.

Also, the relative strength index (RSI) on the hourly and 4-hour chart is nearing the overbought territory (above 70.00).

Weekly chart

Meanwhile, the 5-week, 10-week MA are trending south, indicating the primary trend is bearish. Currently, the 10-week MA is located at 1.1783. The RSI is hovering below 50.00 (into bearish territory).

Hence the bullish momentum is seen waning in the short-term and a convincing break above 1.1852 will likely remain elusive.

On the downside, a weekly close below the rising trendline (drawn from 2016 low and April 2017 low) would weaken the bull case and shift risk in favor of a drop to 1.198 (200-week MA).