The US Dollar got destroyed yesterday, but that was no surprise to technical analysts, as they had seen many signals that this was coming.
Let's take a look, for example, at the EURUSD. The trend was bullish and we were inside the trend continuation pattern (pennant). We also defended the 1.138 support. Because of that, the upswing was more probable. Now traders are using the recent resistance (last two local tops) as the closest support (1.144). After first contact, we can see demand here but the question is: is the bounce sustainable?
Another instrument is Gold, where the weaker USD allowed for the creation of an Inverse Head and Shoulders pattern. The price broke the neckline and then the horizontal resistance. The only problem is that they could not hold that resistance as a support, which increases the chances of a false breakout. The thing is that we all know that false breakouts can get nasty sometimes.
Interesting price action setup can be visible on the EURGBP, where the price used the ascending triangle for an upswing (as the theory says). They broke the horizontal resistance and now there’s a high chance that we’ll use this as a support, but to check that, we still need around 35 pips.