EUR/USD Triple Top Hints At Steady Decline In Bitcoin (BTC)

EUR/USD Triple Top Hints At Steady Decline In Bitcoin (BTC)

The EUR/USD forex pair rallied aggressively yesterday amid the uncertainty surrounding the UK election. We have Boris Johnson back in the office which is good for business and certainty in financial markets. Most markets will therefore go back to doing what they were supposed to do. This rally in EUR/USD is likely to be reversed now that it has formed a triple top. We have been discussing the probability of this triple top weeks before it happened. Although it did not have much of an impact on Bitcoin (BTC) recently when it rallied, it is still likely to have an impact on the cryptocurrency markets when it declines.

We can see on the 4H chart for EUR/USD that the pair does not have much room for further upside. At most, we could see a move towards the red fib Bollinger band on the chart. That is what happened the last time when the pair topped out. The Euro is unlikely to project further strength against the US Dollar. The recent move seems to have been mostly the result of speculation around the outcome of Brexit. With the Tory leader back in office, we can now expect the government to “get Brexit done” which will restore certainty to the market and thus we can expect a definitive direction in the markets in the near future. This means that EUR/USD could decline in the near future and the cryptocurrency market is likely to decline with it.

Bitcoin (BTC) has temporarily climbed above the $7,200 mark and is now struggling hard to remain above it. If it succeeds in doing that, we could be looking at a potential rally towards the $7,407 level and potentially much higher to the trend line support turned resistance. However, it is not worth the risk reward to be chasing any such move because it is likely to be short-lived.

The price is now at a major risk of a decline to the bottom of the falling wedge. This could happen before the end of the month. If BTC/USD declines again, it could easily take out the previous lows of November. This move in Bitcoin (BTC) will set the ground for a crash down to the 200 Week EMA. So far, the price is holding strongly above the 100 Week EMA but a decline below it would easily pull it down to the $5,500 level. The risk/reward is simply not worth chasing the price for any short-term bullishness.

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