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EUR/USD Will the Double Top Stay in Place?

A question we should ask when looking at the EUR/USD daily chart is whether the double top will remain in place. So far, price action suggests it is. June's consolidation a bullish correction was stalled at 1.37, near the base of that double top. Price eventually fell and is holding below the 200-, 100-, and 50- day simple moving averages. The RSI has also pushed to 60 after tagging 30. If it holds below 60, it reflects the development of bearish momentum.

(eurgbp daily chart, 7/9)

The technical picture thus suggests the EUR/USD is on its way to the 1.3475-1.3505 lows on the year. IF the USD falters however and the EUR/USD rallies above last week's high of 1.37, then the last line of defense is probably around 1.38. 

Around 1.38 are some previous resistance levels, and the 61.8% retracement. A break above 1.38 should reflect bullish continuation, and a hold below it maintains a sideways market, with the double top still technically in play.

The bullish scenario opens up the 1.3990-1.40 area. The bearish scenario has pressure on the 2014 low. Below 1.3474, the next key support will be the Nov. 2013 low around 1.3295-1.33.