EUR/USD Forecast: bearish ‘Rising Wedge’ formation on daily chart

The US Dollar began 2018 at the lowest level in over three-month and helped the EUR/USD pair to hold its neck above the key 1.20 psychological mark. Against the backdrop of fading optimism over the biggest tax reform in over three-decades, sliding US Treasury bond yields further added to the greenback woes and has been the main catalyst behind the pair's recent up-move. 

The pair traded with a mild positive bias for the fourth consecutive session and is slowly moving back towards multi-year highs, touched in September 2017. Traders now look forward to the final Euro-zone PMI prints for some trading impetus at the start of a week full of important macro releases, scheduled at the beginning of a new month.

From a technical perspective, the pair could be in the process of forming a bearish reversal - 'Rising Wedge' chart pattern on the daily chart and is currently placed closer to the pattern resistance near the 1.2030-35 region. A convincing break through the mentioned hurdle would negate the bearish formation and help the pair to build on its near-term bullish momentum towards 1.2070-90 supply zone. 

Alternatively, a reversal from current resistance area and a subsequent drop below the 1.20 handle is likely to trigger a corrective slide towards mid-1.1900s before the pair eventually breaks below the 1.1900 round figure mark and test its next support near the 1.1875-70 region.