EOS / USD Technical Analysis: Winter Is Coming Back
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- EOS is bullish in the short-term after breaking through the neckline of an inverted head and shoulders pattern
- Short-term technical indicators appear ready to roll-over which may signal a near-term pullback in the pair
- Medium-term outlook remains bearish for EOS
EOS / USD Short-term price analysis
In the short-term EOS is bullish, although technical indicators on the four-hour time frame appear to be rolling over. The move higher was encouraged by the broader crypto market rally and by the triggering of a bullish inverted head and shoulders pattern.
The bullish inverted head and shoulders pattern appears to have reached its full upside potential, while the overall rally has so far failed to reach the important January 10th high.
EOS / USD H4 Chart (Source: TradingView)
Pattern Watch
Traders should watch for the EOS / USD pair to start making lower highs in the near-term as it will likely signal that the recent rally is over. The neckline of the bearish head and shoulders pattern provides a solid downside target if a decline does take place.
Key Moving Averages
Price is trading above its the 50 and 200-period moving average on the four-hour time frame, which signals that the EOS / USD pair remains bullish in the short-term.
MACD Indicator
The MACD histogram has started to trend lower, while the signal line is attempting to move lower after moving into oversold territory.
EOS / USD Medium-term price analysis
In the medium-term, EOS is bearish with the pair still trading below its key 100-day and 200-day moving averages and a large head and shoulders pattern.
A bullish triangle break has recently occurred on the daily time frame, although further technical confirmation is needed at this early stage.
Both the RSI and Stochastic indicators have reached oversold conditions on the daily time frame, while the MACD histogram is showing that the recent bullish move is losing steam.
EOS / USD Daily Chart (Source: TradingView)
Pattern Watch
Traders should watch daily price closes around the triangle pattern as it will provide a good indication of how sustainable the recent upside rally will likely be. The head and shoulder patterns neckline provides a solid upside target if the pair continues to trade high.
Key Moving Averages
The EOS / USD pair is testing its 50-day moving average with the 200-day moving average currently converging with the large head and shoulders patterns neckline.
MACD Indicator
The Daily MACD indicator is slightly bullish on the daily time frame.
Stochastic + RSI Indicators
Both the Stochastic and the RSI indicators have reached oversold conditions on the daily time frame; this may signal a reversal over the medium-term.
Conclusion
EOS is trading at a critical juncture and will need to perform a strong upside rally in order to shift its medium-term bearish bias. Ultimately, price still trades below the neckline of a large head and shoulders pattern with significant downside potential.
Trading action around the triangle on the daily time frame will give a strong indication if the EOS / USD pair is likely to keep rallying over the coming days.
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