EURUSD - Possibly change in direction?.

The EURUSD bullish 'Cup and Handle' pattern, which has been very much in my focus the past few weeks, is looking rather troubled. The breakout last week stalled quickly at the weekly resistance line which connects weekly closing highs from summer 2008, late 2009, and the high in late 2010. (See upper chart below). This morning the market has broken below the 1.3850/60 breakout level, (so far this is only a minor breach), however the longer it is maintained, and the deeper it moves, the greater the likelihood that this is a significant failure. Further to that, there is rising trend-line support just below current levels around 1.3805, a breakthrough here combined with the Bearish Divergence on the daily RSI and MACD, could spell the death-knell for the 'Cup and Handle' pattern. (Though, just as a caveat, the breakout of this type of formation, is often a tortured affairs, and a dip like this, followed by a 'screw-you' rally, is not untypical). - If however, this does turn out to be a failed 'Cup and Handle' pattern, the failure could have serious consequences for a much deeper pullback to the low 1.3000s.

Bund Update - Re Cup and Handle pattern.

This morning has also seen a failure in the bearish Bund 'Cup and Handle' pattern, I highlighted a couple of days back. This could also be significant in the short-term, with a risk of a move back up to trend-line resistance around 122.85/90.

MID-DAY UPDATE. 
EURUSD languishing above 1.3805, and below 1.3850.   Not much conclusion yet...
Bund failed to hold the morning's gains, and is close to 121.80 again. The original bearish Cup and Handle scenario is still a possibility on the Bund, as is the failed C and H at this stage. Right now, the inability to hold over 122.00 so far is not encouraging, but lets see where subsequent price action heads.